Houston-dependent contract drilling business Diamond Offshore submitted for Chapter eleven individual bankruptcy security in Texas on Sunday. The business cited a drop in desire due to the ongoing coronavirus pandemic and the oil price tag war involving OPEC and Russia. The business also explained the marketplace for its services “worsened precipitously” this year.
“After a watchful and diligent review of our money options, [we] concluded that the best route forward for Diamond and its stakeholders is to search for Chapter eleven security,” chief executive officer Marc Edwards explained. “Through this method, we intend to restructure our balance sheet to attain a more sustainable financial debt degree to reposition the business enterprise for very long-term results.”
Diamond has posted losses totaling $one.2 billion in excess of the past 5 yrs. It recorded losses in 4 of the past 5 yrs. In 2017, it recorded a revenue of $18 million. It lost $357 million past year.
Diamond Offshore is the fifth publicly traded oil business to file for individual bankruptcy in the past thirty days as oil desire continues to drop, according to BankruptcyData.com. Continuous crude oil futures fell 22.six% in early trading Monday morning.
The business explained it had about $2 billion in very long-term financial debt as of Dec. 31, as opposed to $156 million in funds. It mentioned Bank of New York Mellon as its largest creditor, with a blended $2 billion in statements. Its second-largest creditor, National Oilwell Varco, had about $six.2 million in statements.
“Diamond intends to use the proceedings to restructure and fortify its balance sheet and attain a more sustainable financial debt profile, although continuing to emphasis on safe, dependable, and successful contract drilling services for its international clientele,” the business explained in a assertion.
The business, which has considerable operations in the Gulf of Mexico, explained it had adequate money to fund operations throughout the reorganization. Hess and Occidental Petroleum are between its largest clients.
Diamond’s share price tag fell sixty one% Monday morning prior to trading was halted.