Another North Dakota shale oil driller has filed for bankruptcy protection.  On May 20, 2016, Intervention Energy Holdings LLC, and its affiliates (“Debtors”) sought chapter 11 protection from the United States Bankruptcy Court for the District of Delaware.

Other Williston Basin, ND shale oil victims include Emerald Oil Inc., and Halcón Resources Corp., which indicated that it plans to file for chapter 11 protection if it can get enough creditors to sign off on a deal that would let it restructure more than $3 billion in debt.

According to the Declaration of John R. Zimmerman in Support of the Debtor’s Chapter 11 Petitions and First Day Motions, depressed crude oil prices have contributed to the Debtors’ downward spiral.  The Debtors seek first day relief at a first day hearing scheduled for tomorrow, May 25th at 2:30 p.m.  Among other things, the Debtors have filed a cash collateral motion, wage motion, and a motion to maintain insurance coverage.

The case is pending before the Honorable Kevin J. Carey.  The Debtors are represented by the law firm of DLA Piper.

Carl D. Neff is a bankruptcy attorney with the law firm of Fox Rothschild LLP.  Carl is admitted in Delaware and regularly practices before the United States Bankruptcy Court for the District of Delaware. You can reach Carl at (302) 622-4272 or at cneff@foxrothschild.com.

Swift Energy Co. (“Swift”) has become the latest U.S. shale driller to file for Chapter 11 bankruptcy, filing a voluntary petition on December 31, 2015.  Swift pumps oil in the Eagle Ford Shale in South Texas and in Louisiana fields.

According to the first day declaration of Dean Swick, Swift’s chief restructuring officer and a restructuring consultant at Alvarez & Marsal, “[t]he recent collapse in oil prices is among the most severe on record.”  Swick went on to state that “[i]ndependent exploration and production companies like Swift have been particularly hard hit because they rely primarily on sales of oil and gas to generate revenue.”

Swift Energy had trimmed 60 percent of its capital budget, cut 20 percent of its workforce and reduced its office space to cope with the 68-percent slide in U.S. crude prices over the past 19 months.

In a restructuring deal subject to bankruptcy court approval, Swift has agreed with its creditors to convert its senior debt to equity.  Per court filings, Swift has approximately $1 billion in assets and $1.35 billion in debt. The company’s third-quarter revenues sank 55 percent from the same period the prior year, and it posted a $354.6 million net loss from July to September, mostly because it had to write down the value of its oil and gas properties.

The case is pending before the Honorable Mary Walrath.  The law firm of Richard, Layton and Finger, P.A. represents Swift in its bankruptcy proceeding.

Carl D. Neff is a partner with the law firm of Fox Rothschild LLP.  You can reach Carl at (302) 622-4272 or at cneff@foxrothschild.com.