An oil producing company with ties to Fallon County and western North Dakota reportedly has agreed to a restructuring plan with creditors to help eliminate more than $2 billion in debt.
In addition to eliminating its $2.1 billion in bond debt, Denbury Resources filed for Chapter 11 bankruptcy as part of a pre-packaged plan designed to lessen the financial burden on the company.
While eliminating legacy debt, the company lenders will provide up to approximately $615 million in debtor financing. The funding would reportedly allow normal operations but with court supervision.
The company had $2.2 billion in debt after the first fiscal quarter.
It is not the first oil company to file for bankruptcy after the recent collapse of the oil prices earlier this year.
According to a press release sent out July 29, the company entered into a Restructuring Support Agreement with funded debt holders holding 100 percent of revolving credit facility loans, approximately 67.2 percent of second lien notes and approximately 70.8 percent of convertible notes for a “pre-packaged” plan that will eliminate the company’s $2.1 billion of bond debt.
“Denbury expects to continue normal operations throughout the Court-supervised process. Pursuant to their commitment letter, the company’s existing lenders will provide a debtor-in-possession (“DIP”) revolving loan that will “roll” into an exit facility with up to $615 million in availability. Following court approval, the company expects this financing, together with cash flow from operations, to support the business during the Court-supervised process,” the release explained.
According to company web page, the 20-inch Greencore Pipeline in Wyoming was the first CO2 pipeline we constructed in the Rocky Mountain region.
“We plan to use the pipeline as our trunk line in the Rocky Mountain region, eventually connecting our various Rocky Mountain region CO2 sources to the Cedar Creek Anticline in eastern Montana and western North Dakota. The 232-mile pipeline begins at the ConocoPhillips-operated Lost Cabin gas plant in Wyoming and terminates at Bell Creek Field in Montana. We completed construction of the pipeline in 2012 and received our first CO2 deliveries from the ConocoPhillips-operated Lost Cabin gas plant during 2013. During 2014, we completed construction of an interconnect between our Greencore Pipeline and an existing third-party CO2 pipeline in Wyoming, which enables us to transport CO2 from LaBarge Field to our Bell Creek Field.
“In mid-2018, we sanctioned the CO2 enhanced oil recovery development project at Cedar Creek Anticline, which requires a 105-mile extension of the Greencore CO2 pipeline to CCA from Bell Creek Field, the company explained.