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Privately held oil and gas exploration and production company Chaparral Energy Inc. will not make an interest payment due April 1 tied to a $300 million bond, Reuters reported yesterday. The company, which acquires and develops oil and natural gas properties in Oklahoma, Texas and Kansas, said in its annual report filed on Wednesday that it may seek chapter 11 bankruptcy. It had missed a separate $16.5 million interest payment due March 1, kicking off a 30-day grace period. Chaparral lost $1.3 billion in the year ended Dec. 31, and has about $1.6 billion in debt, according to its annual report. The company drew down the balance on its $548 million revolving line of credit in February. The lenders will re-determine the credit facility on May 1, and Chaparral expects its borrowing base will be decreased significantly, it said in its annual report.

As oil prices nosedived by two-thirds since 2014, a belief took hold in global energy markets that for prices to recover, many U.S. shale producers would first have to falter to allow markets to rebalance, Reuters reported today. With U.S. oil prices now trading below $40 a barrel, the corporate casualties are already mounting. More than 50 North American oil and gas producers have entered bankruptcy since early 2015, according to a Reuters review of regulatory filings and other data. While those firms account for only about 1 percent of U.S. output, based on the analysis, that count is expected to rise. Consultant Deloitte says a third of shale producers face bankruptcy risks this year. But a Reuters analysis has found that bankruptcies are so far having little effect on U.S. oil production, and a tendency among distressed drillers to keep their oil wells gushing belies the notion that deepening financial distress will prompt a sudden output decline or oil price rebound. Read more. 

Has the final shoe dropped for the E&P industry? A session at ABI's 34th Annual Spring Meeting features experts discussing energy industry distress. Click here to register. 

Get a better understanding of what happens when an oil, gas or other natural resources company goes bankrupt. Pre-order your copy of ABI's updated and expanded When Gushers Go Dry: The Essentials of Oil & Gas Bankruptcy, Second Edition. 

Molycorp Inc. won court approval to exit chapter 11 protection yesterday under a plan that leaves the fate of the sole U.S. source of rare earths uncertain, the Wall Street Journal reported today. Bankruptcy Judge Christopher Sontchi confirmed a plan that puts a trimmed-down Molycorp largely in the hands of senior lender Oaktree Capital Management. Unsecured creditors will share a minority stake in the company, which is being rebuilt around the Neo line of businesses that process rare earths. As for the Mountain Pass mine in California, which is the only U.S. mine producing elements essential to electronics including cellphones and defense systems, it could be facing liquidation, or it could be targeted for a deal involving an unnamed foreign entity. The situation is “fluid,” Judge Sontchi commented during hearings in the U.S. Bankruptcy Court in Wilmington, Del. Molycorp bondholders yesterday won court approval to buy mineral rights and intellectual property associated with the facility, but are leaving the mine itself behind. To counter protests from regulators concerned Molycorp was walking away from environmental risks, the company pointed to surety bonds and the scrap value of the plant, which will help fund a cleanup.

Bowie Resource Partners is scrapping a loan sale that would’ve funded its purchase of mines from Peabody Energy Corp., jeopardizing a deal that would help stave off a Peabody bankruptcy filing, Bloomberg News reported yesterday. The company dropped the $650 million financing after getting a cool reception from investors. Bowie had put the loan deal on hold last month and was seeking to renegotiate the terms of the purchase. The asset sale was critical to Peabody, which has until April 14 to make an overdue interest payment. The largest U.S. coal miner, which has been ravaged by the coal market’s worst downturn in decades, this month said it may not be financially strong enough to remain in business in its current form and may seek bankruptcy protection.

Oil and gas producer Midstates Petroleum Co. Inc. raised doubts about its ability to remain as a going concern and said it may need to seek chapter 11 protection, Reuters reported yesterday. Midstates Petroleum said yesterday that it had engaged financial and legal advisers to analyze strategic alternatives to address its liquidity and capital structure. Oklahoma-based Midstates had total debt of about $1.8 billion as of Feb. 26, excluding outstanding borrowings under its credit facility. The company had cash and cash equivalents of about $81 million as of Dec. 31.

SandRidge Energy Inc. confirmed yesterday that it has hired advisers to evaluate options including a bankruptcy filing, in what could be the most high-profile reorganization yet in U.S. shale oil industry, Reuters reported. The company, battered by a 60 percent slide in oil prices since mid-2014, said in a regulatory filing there was substantial doubt about its financial viability. The company "has engaged advisors to assist with a private restructuring or reorganization under Title 11 of the U.S. Bankruptcy Code in the foreseeable future," the filing said. SandRidge is one of dozens of oil and gas companies with piles of debt that look increasingly difficult to pay as revenues, oil and gas output, and reserves tumble on low prices. A pullback in expensive new drilling means SandRidge's oil and gas output fell 18 percent in the fourth quarter of 2015 compared with the same period a year ago. Read more. 

Has the final shoe dropped for the E&P industry? A session at ABI's 34th Annual Spring Meeting features experts discussing energy industry distress. Click here to register. 

Get a better understanding of what happens when an oil, gas or other natural resources company goes bankrupt. Pre-order your copy of ABI's updated and expanded second edition of When Gushers Go Dry: The Essentials of Oil & Gas Bankruptcy. 

The owner of Roscoe's House of Chicken and Waffles has filed for bankruptcy as the famous Californian soul food restaurant's parent company, East Coast Foods, Inc., says that it owes creditors between $10 million and $50 million with assets totaling less than $50,000, CNNMoney.com reported yesterday. Roscoe's, which has five locations in the Los Angeles area, has drawn big names including President Barack Obama, Snoop Dogg, David Beckham and Larry King. According to court documents, East Coast Foods owes $3.2 million to Daniel Beasley, a black employee who successfully sued the company for harassment and discrimination while he was employed at a Roscoe's restaurant. In September 2015, a jury ordered the company to pay Beasley $1.6 million in damages and another $1.6 million for attorneys' fees.

Valeant Pharmaceuticals International Inc. said it has proposed a deal with its lenders to avoid a default by extending its filing deadlines and restricting the company from making some acquisitions, the Wall Street Journal reported today. Valeant is seeking to extend a lender-imposed deadline for filing its annual report as it undertakes an in-house review of its accounting procedures. If the deadline is missed, Valeant said that it faces a potential default on its debt. The Canadian pharmaceutical company said it is planning on filing the annual report by April 29 but wants the deadline extended to May 31. It also wants to extend the deadline for its report covering the quarter ending Thursday to July 31 from June 14. Valeant also said today that the internal committee assigned to investigate its accounting practices is “nearer” to finishing its work and hasn't identified any additional items impacting its financial statements beyond the ones identified earlier.

Spanish energy company Abengoa SA has filed for bankruptcy protection in the U.S. as it continues talks with its banks and bondholders to agree on its plan to restructure billions of dollars in debt, the Wall Street Journal reported today. The renewable energy company, which operates around the world, on Monday night filed for chapter 15 protection in U.S. Bankruptcy Court in Wilmington, Del. The bankruptcy filing comes after Abengoa struck a deal with key creditors that gives it more time — through Oct. 28 — to continue negotiations on restructuring its debts, which court papers show total more than €14.6 billion ($16.48 billion). The company hopes the U.S. bankruptcy will provide extra breathing room for these talks.

U.S. solar company SunEdison Inc, whose aggressive acquisition strategy has saddled it with more than $11 billion of debt, is at “substantial risk” of bankruptcy, one of its two publicly listed units warned today, Reuters reported. SunEdison’s shares — already reeling from a Wall Street Journal report that the company was being investigated for overstating its cash position — fell as much as 38 percent in premarket trading. TerraForm Global Inc, one of two SunEdison “yieldcos,” said it would join its parent and fellow yieldco TerraForm Power Inc. in delaying its annual report for the year ended Dec. 31. However, TerraForm Global said that it did not rely substantially on SunEdison for funding or liquidity and that it would have sufficient liquidity to support its operations even if its parent sought bankruptcy protection. TerraForm Global’s annual report was due by March 30.