California Resources Corp. filed for chapter 11 yesterday after defaulting on interest payments, becoming the latest U.S. energy company to seek bankruptcy protection in recent months following the slump in oil prices, Reuters reported. The oil and gas producer reached an agreement for $1.1 billion debtor-in-possession financing package, which also refinances the company’s current revolving loan facility. The oil driller filed for pre-arranged restructuring in the bankruptcy court in the Southern District of Texas, and listed both assets and liabilities in the range of $1 billion to $10 billion. California’s biggest oil and natural gas producer has been weighed down by massive borrowings since its spinoff from Occidental Petroleum in 2014. Like many of its peers, California Resources cut its production and capital spending, and also told investors in May that the company might not be able to continue operations without restructuring its debt. The pre-arranged restructuring will eliminate more than $5 billion of debt, and term lenders have agreed to backstop a $450 million equity rights offering and a $200 million second lien exit financing facility, California Resources said.
