Oil and gas producer White Star Petroleum LLC filed for Chapter 11 bankruptcy and obtained $28.5 million in debtor-in-possession financing to bolster liquidity, according to a May 28 release.
The Chapter 11 filing was made with the U.S. Bankruptcy Court for the District of Delaware. White Star said five vendor creditors filed another, involuntary Chapter 11 case against it May 24 in the U.S. Bankruptcy Court for the Western District of Oklahoma.
"We recognize that the uncertainty of the past months has been difficult for many of our stakeholders but are pleased to have the support of our [reserve-based lenders] and an appropriate budget established for operations in Chapter 11," White Star CEO Elliot Chambers said in the release.
The Wall Street Journal reported May 28 that lenders reduced the company's access to cash after it failed to make required debt payments. White Star Petroleum's debts include a $274 million secured revolving credit line, a $58 million secured term loan from EnLink Midstream LLC unit EnLink Oklahoma Gas Processing LP and $10 million in unsecured bonds. White Star also said it was stressed financially in the recent years owing, in part, to low production volumes and higher-than-expected operational costs.
The company said investment bank Guggenheim Securities LLC was hired to help with the Chapter 11 case and to help it explore strategic alternatives that include selling the business or restructuring its balance sheet. Alvarez & Marsal North America LLC is acting as financial adviser, while Sullivan & Cromwell LLP and Morris Nichols Arsht & Tunnell LLP were tapped as legal advisers.
White Star Petroleum, formerly known as American Energy - Woodford Holdings LLC before changing its name in 2016, owns and operates oil and gas reserves in Oklahoma.