Oil producer Samson Resources disclosed in a regulatory filing on yesterday that it might try to reorganize under chapter 11, the New York Times reported today. When a group of investors led by Kohlberg Kravis Roberts bought the oil producer Samson Resources for $7.2 billion more than three years ago, analysts regarded the deal as a triumph. Now, burdened by tumbling oil prices and a heavy debt load, Samson may have to turn to bankruptcy protection. As of yesterday, the price of West Texas intermediate crude oil was $47.69 a barrel, less than half of what it was at the time of the transaction. The price of natural gas also tumbled, further squeezing the company’s profits. Samson’s troubles are readily apparent from its 2014 results. Cash flow from operations fell 29 percent from the year before, to $488 million. And its net debt load grew to $3.9 billion. http://www.nytimes.com/2015/04/01/business/dealbook/energy-company-samson-hints-at-bankruptcy.html?_r=0
Looking for more information about the current distress in the oil industry? Read the feature article in the March edition of the ABI Journal, "The New Energy Crisis: Too Much of a Good Thing (Debt, That Is)."
For more on oil and gas bankruptcies, be sure to pick up a copy of ABI's When Gushers Go Dry: The Essentials of Oil & Gas Bankruptcy. Click here to order your copy.
