US-based oil and natural gas company Energy XXI has filed for bankruptcy protection in the US, amid challenging market environment.
The bankruptcy protection follows a restructuring support agreement signed by the company with holders of more than 63% of the company’s secured second lien 11.0% notes, on the terms of a debt-for-equity swap.
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The company will eliminate more than $2.8bn in debt from its balance sheet through the Chapter 11 restructuring.
Energy XXI president and CEO 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."
According to the documents presented to the US bankruptcy court in Houston, the company has sufficient liquidity, including $180m of cash on hand as of 31 March 2016, as well as funds generated from the company’s ongoing operations to continue its operations during the financial restructuring process.
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By GlobalDataThe company anticipates that the restructuring support agreement will strengthen its financial position by reducing long-term debt and enhancing financial flexibility.
Energy XXI is an an oil-focused company with assets in South Louisiana and on the Gulf of Mexico Shelf. It operates ten of the largest oilfields on the Gulf of Mexico Shelf.
The company currently has more than 750,000 acres of leasehold and more than 16,000 square miles of 3D seismic data.
