Energy XXI, a U.S. Gulf of Mexico oil producer, has filed for bankruptcy protection in the United States Bankruptcy Court for the Southern District of Texas, Houston Division.
The company entered Chapter 11, after it reached an agreement with some of its noteholders on the restructuring of the company.
“Through the Chapter 11 restructuring, Energy XXI will eliminate more than $2.8 billion in debt from its balance sheet, substantially deleverage its capital structure and position the Company for long-term success,” the oil firm said.
Under the restructuring support agreement, John Schiller will continue as the reorganized company’s Chief Executive officer.
Energy XXI’s President and Chief Executive Officer John Schiller said, “Today’s announcement reflects the next step in our efforts to respond proactively to the challenging market environment.”
“Over the last several months, we have worked to actively manage our balance sheet, and after thoroughly evaluating our options with the help of our outside advisors, we determined that entering these agreements and implementing them through a court-supervised process is the best course of action for Energy XXI and all our stakeholders. We are confident that we are taking the right steps to provide Energy XXI a solid foundation for a successful future.”
Schiller said: “Our production is on track as we continue to focus our operations on low-risk, high-return projects. We thank our employees for their continued hard work and dedication, and we look forward to working with our vendors and partners as we move through this process and position Energy XXI to emerge as a stronger company.”
Energy XXI said expects operations to continue as normal throughout the court-supervised financial restructuring process, including paying royalty and surety obligations in the ordinary course.
In a statement on Thursday, the company said it believed it had sufficient liquidity, including approximately $180 million of cash on hand as of March 31, 2016 and funds generated from ongoing operations, to continue its operations and support the business in the ordinary course during the financial restructuring process.
To remind, Energy XXI in June 2014 acquired of EPL Oil & Gas for approximately $2.3 billion. The acquisition, Energy XXI said at the time, made Energy XXI the largest publicly traded independent operator on the Gulf of Mexico shelf.