Oasis Petroleum files for bankruptcy after shale downturn

FILE PHOTO: A drilling rig on a lease owned by Oasis Petroleum performs logging operations in the Permian Basin near Wink, Texas U.S. August 22, 2018. REUTERS/Nick Oxford

(Reuters) – Oasis Petroleum Inc OAS.O filed for Chapter 11 bankruptcy protection on Wednesday, the latest U.S. shale producer to seek court-aided restructuring as the energy industry reels from an unprecedented crash in oil prices caused by the COVID-19 pandemic.

The company listed assets and liabilities in the range of $1 billion to $10 billion, according to a court filing.

Oasis said it secured $450 million in debtor-in-possession financing and expects to cut debt by $1.8 billion through the restructuring. It had long-term debt of $2.76 billion with just $77.4 million in cash and cash equivalents as of June 30.

Lockdowns to stem the spread of the virus decimated travel and the demand for fuel, bringing oil drilling to a halt and leaving many shale producers with no source of cash to repay massive debt taken on in past years.

Peers Chesapeake Energy Corp and Chaparral Energy Inc filed for bankruptcy earlier this year, while Whiting Petroleum Corp WLL.N emerged from Chapter 11 bankruptcy and completed its financial restructuring at the start of this month.

“Due to historically low global energy demand and commodity prices, we determined it is best for Oasis Petroleum to take decisive action to strengthen our liquidity,” Chief Executive Officer Thomas Nusz said in a statement.

Oasis said upstream operations and production would continue normally as restructuring happens, adding that its independent pipeline company Oasis Midstream Partners LP OMP.O and other subsidiaries in which it owns an equity interest are not included in Chapter 11 proceedings.

Reporting by Rama Venkat in Bengaluru; Editing by Ramakrishnan M.

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