Bankrupt Emerald Oil Plans to Sell Assets

by San Antonio Attorney

Emerald Oil is the most recent oil driller to join the roster of companies filing for Chapter 11 bankruptcy protection.  Despite struggling with financial difficulties, Emerald Oil plans to sell the business and auction it off to potential buyers.

Ryan Smith, Chief Financial Officer of Emerald Oil, revealed that the company stopped its drilling operations last 2015, laid off 40 percent of its employees and attempted to refinance debt.  However, the solution was not able to push through four attempts.

Smith said through court papers that the debtors have been affected by same macroeconomic forces that have debilitated the oil and gas industry.  The company was seriously considering other options but its accessibility to capital markets was impaired and there was a plummet of the value of developed reserves.

Emerald Oil, based in Denver, extracts majority of its crude oil from Williston Basin, located in North Dakota.  The place has declined and was reduced to a fraction of what it was before.  Another precipitating factor was the drop of oil prices in 2014.  Emerald Oil has a total of $405 million in total assets and another $361 million in debt as well.

The oil company aims to sell at an auction, though Latium Group, a private group already has dibs on it.  Latium will be the leading bidder of the auction.

A $20 million loan was given through court approval to maintain Emerald Oil’s operations throughout the bankruptcy process.

McAndrew Rudisill, CEO of Emerald Oil, said in a written statement that the oil company’s plan with Laitum provides the opportunity to have a recovery for the stakeholders and maintain its operations at the same time.  JPMorgan Chase & Co, has recorded 48 oil companies in the local setting to have filed for bankruptcy protection.

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