Houston-based mostly agreement drilling firm Diamond Offshore filed for Chapter eleven individual bankruptcy defense in Texas on Sunday. The firm cited a drop in demand thanks to the ongoing coronavirus pandemic and the oil rate war involving OPEC and Russia. The firm also reported the market place for its services “worsened precipitously” this 12 months.
“After a mindful and diligent evaluate of our financial choices, [we] concluded that the best route forward for Diamond and its stakeholders is to seek out Chapter eleven defense,” chief govt officer Marc Edwards reported. “Through this procedure, we intend to restructure our stability sheet to reach a extra sustainable debt level to reposition the enterprise for lengthy-term accomplishment.”
Diamond has posted losses totaling $1.2 billion over the very last five many years. It recorded losses in four of the very last five many years. In 2017, it recorded a income of $eighteen million. It missing $357 million very last 12 months.
Diamond Offshore is the fifth publicly traded oil firm to file for individual bankruptcy in the very last thirty days as oil demand continues to drop, in accordance to BankruptcyData.com. Continuous crude oil futures fell 22.six{79e59ee6e2f5cf570628ed7ac4055bef3419265de010b59461d891d43fac5627} in early trading Monday morning.
The firm reported it had about $2 billion in lengthy-term debt as of Dec. 31, as opposed to $156 million in cash. It mentioned Bank of New York Mellon as its greatest creditor, with a mixed $2 billion in claims. Its 2nd-greatest creditor, National Oilwell Varco, had about $six.2 million in claims.
“Diamond intends to use the proceedings to restructure and improve its stability sheet and reach a extra sustainable debt profile, though continuing to target on secure, reputable, and efficient agreement drilling services for its global customers,” the firm reported in a assertion.
The firm, which has important functions in the Gulf of Mexico, reported it had sufficient money to fund functions through the reorganization. Hess and Occidental Petroleum are among the its greatest customers.
Diamond’s share rate fell sixty one{79e59ee6e2f5cf570628ed7ac4055bef3419265de010b59461d891d43fac5627} Monday morning ahead of trading was halted.
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