LA and MS driller Goodrich files bankruptcy

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Source:   —  April 17, 2016, at 0:57 AM

Houston-based Goodrich Petroleum filed for Chapter eleven bankruptcy Friday after securities owners rejected swapping their holdings for common stock to lower debt payments.

LA and MS driller Goodrich files bankruptcy

One of the oil companies most active in drilling wells in the Tuscaloosa Marine Shale formation in MS and LA has sought bankruptcy protection.

Houston-based Goodrich Petroleum filed for Chapter eleven bankruptcy Friday after securities owners rejected swapping their holdings for common stock to lower debt payments. The company cites $99 million in assets against $507 million in debts.

Law firm Haynes & Boone says sixty N American petroleum companies have sought bankruptcy since 2014.

Goodrich says it wants to shed $400 million in debt during restructuring, pre-negotiated with creditors owning $175 million in debt. Those secured creditors would obtain new stock, while the company would pay nothing to owners of $224 million in unsecured debt.

The company also has interests in the Haynesville Shale gas fields of northwest LA and E Texas, with a total of one hundred ninety-three wells across eight states.

Law firm Haynes & Boone says nearly sixty N American oil and natural gas companies have sought bankruptcy since 2014.

Goodrich is a tiny player in the oil world, and had focused on developing the Tuscaloosa shale formation. Wells in that region of southwest MS and the FL Parishes of LA were among the highest-cost oil wells being drilled when prices began to fall, and drilling action quickly dwindled. A no of wells were drilled but not hydraulically fractured, as companies wait for higher prices to start pumping.

Chief Operating Officer Robert Turnham, in Ct papers, said the plunge in oil prices punctured company finances. While Goodrich was getting $105 a barrel for Tuscaloosa Marine Shale crude in two thousand-thirteenth, it got less than $50 per barrel last year.

Goodrich wants a federal bankruptcy judge to approve a map cutting debt to $40 million and reducing interest payments by more than $30 million a year. Jr debtholders would've to approve.

The company says that after restructuring, it'd mainly spend to expand gas output in the Haynesville formation, spending a smaller share of exploration dollars in the Tuscaloosa Marine Shale. Goodrich would stay a publicly held company and current managers would stay.

The company says royalty payments won't be interrupted. Goodrich has lease interests in hundreds of thousands of undrilled acres in LA and Mississippi, but a substantial fraction of those leases will expire this year if the company doesn't drill.

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