Extraction Oil & Gas Inc. (OTCMKTS: XOGAQ) has been given the green light to emerge from Chapter 11 bankruptcy early next year.
A U.S. bankruptcy court judge in Delaware upheld the Denver-based oil producer’s bankruptcy plan last week, allowing holders of the company’s $1.13 billion of senior debt securities to agree to cancel this debt in exchange for 97% of the shares of the company that he plans to issue.
Extraction is Weld County’s fourth-largest energy operator, producing just over 18 million barrels of oil and more than 95.85 million MCF of natural gas last year.
It also had 4.4 times more debt on its books at the end of 2019 than its equity, putting it and other heavily indebted energy producers in the region in deep financial distress. after the pandemic and the resulting drop in travel forced oil prices to fall. .
The extraction was expected to file for bankruptcy in the spring, when it opted to take a grace period to pay $14.8 million on long-term debt that was due to arrive in 2024 .
The company laid off dozens of workers during the year due to the demand shock, coupled with an earlier production battle between Saudi Arabia and Russia that flooded the world market with cheaper oil.
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