MOSCOW (Pakistan Point News / Sputnik - 02nd April, 2020) Whiting Petroleum, a large US oil and gas company specializing in shale hydrocarbons, said it had filed for bankruptcy in the light of slump in oil prices.
In March, Financial Times reported that such US oil and gas companies as Whiting Petroleum and Antero Resources had started to explore restructuring options and identify potential consultants.
"Whiting Petroleum Corporation ... and certain subsidiaries ... today [Wednesday] announced that they had commenced voluntary Chapter 11 cases under the United States Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of Texas ... The Company has more than $585 million of cash on its balance sheet and will continue to operate its business in the normal course without material disruption to its vendors, partners or employees," the company said.
According to the press release, Whiting Petroleum expects to have sufficient liquidity to meet its financial obligations during the restructuring period without the need for additional financing.
"Given the severe downturn in oil and gas prices driven by uncertainty around the duration of the Saudi / Russia oil price war and the COVID-19 pandemic, the Company's board of Directors came to the conclusion that the principal terms of the financial restructuring negotiated with our creditors provides the best path forward for the Company," the press release read.
Oil prices halved since early March due to the expected demand slump after the breakup of the OPEC+ oil output cut deal and amid the coronavirus outbreak. After OPEC+ states failed to agree on further output cuts, market analysts began to predict a "price war" between main exporters. According to media reports, Saudi Arabia is trying to eat off Russia's share on its traditional European markets, offering oil with huge discounts. The kingdom officially announced an increase in oil shipments in April to 12.3 million barrels per day, which is 300,000 barrels per day higher than its production capacity. Weak demand and expected increase in shipments has sent price of Russian crude blend Urals to $16.2 per barrel, lowest in more than two decades.
Kremlin spokesman Dmitry Peskov said in March that Russia and Saudi Arabia were not waging price wars on the oil market, explaining that the market slump was due to "unfavorable situation globally."
