Diamond Offshore files for bankruptcy

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Diamond Offshore, Houston-based contract drilling company deposit for Chapter 11 bankruptcy protection in Texas Sunday. The company cited a drop in demand due to the ongoing coronavirus pandemic and the oil price war between OPEC and Russia. The company also said the market for its services “has worsened rapidly” this year.

“After a careful and diligent examination of our financial alternatives, [we] concluded that the best way forward for Diamond and its stakeholders is to seek Chapter 11 protection, ”said Chief Executive Officer Marc Edwards. “Through this process, we intend to restructure our balance sheet to achieve a more sustainable level of debt in order to reposition the business for long-term success. “

Diamond has incurred losses totaling $ 1.2 billion over the past five years. It has recorded losses in four of the past five years. In 2017, he made a profit of $ 18 million. He lost $ 357 million last year.

Diamond Offshore is the fifth publicly traded oil company to file for bankruptcy in the past 30 days as demand for oil continues to decline, according to BankruptcyData.com. Continuous crude oil futures fell 22.6% early in Monday morning.

The company said it had about $ 2 billion in long-term debt as of Dec.31, compared to $ 156 million in cash. This listed Bank of New York Mellon as its largest creditor, with a total of $ 2 billion in receivables. Its second creditor, National Oilwell Varco, had approximately $ 6.2 million in receivables.

“Diamond intends to use the process to restructure and strengthen its balance sheet and achieve a more sustainable debt profile, while continuing to focus on safe, reliable and efficient contract drilling services for its global clients,” said the company said in a statement.

The company, which has significant operations in the Gulf of Mexico, said it has enough capital to fund operations during the reorganization. Hess and Occidental Petroleum are among its largest customers.

Diamond the stock price fell 61% on Monday morning before the end of trade.

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