Sheridan Production Partners II LLC filed for bankruptcy with plans to hand ownership to its lenders, subject to better bids, WSJ Pro Bankruptcy reported. The transaction is aimed at reducing the oil-and-gas company’s $1.1 billion debt load by about $900 million. The Houston-based company and several affiliates filed chapter 11 petitions Sunday in the U.S. Bankruptcy Court in Houston. Industry challenges have squeezed liquidity, making it difficult for the business to make interest payments on its debt, the business said. Sheridan’s slide into bankruptcy comes about a year after it began looking for ways to restructure. Sheridan borrowed heavily to buy producing oil fields — several of which are in Texas — but slumped after energy prices nosedived in 2014. By the end of 2018, it was out of compliance with one of its loan covenants. To avoid a default, Sheridan got waivers from some of its lenders that lasted until the end of May.
