Denbury Resources Inc. became the latest debt-laden oil producer to seek bankruptcy protection in the aftermath of a pandemic-fuelled plunge in crude prices.
The Plano, Texas-based producer filed for Chapter 11 reorganization in the U.S. Bankruptcy Court for the Southern District of Texas. It joins a long list of other oil and gas producers that have been forced to seek protection in recent months. The most well-known of those names, Chesapeake Energy Corp., filed for Chapter 11 in June.
Denbury elected in mid-July to skip paying about $3 million of interest on senior subordinated notes maturing in 2023, triggering a 30-day grace period before it entered a formal default.
The U.S. energy industry has been hammered by low crude prices after the Covid-19 pandemic zapped demand, and natural gas prices have been depressed by a stubborn glut of domestic production. Many companies in the sector were circling the drain long before the pandemic, following years of heavy borrowing to fund constant drilling.
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