(Bloomberg) -- American Eagle Energy Corp. filed for bankruptcy protection in Colorado after the slump in crude prices prevented it from servicing debt it took on less than a year ago.
Last August, with oil close to $98 a barrel, American Eagle sold $175 million of bonds. Since then, crude prices have dropped by about half, putting American Eagle in the same bind as other small oil and gas companies that are defaulting or seeking bankruptcy to restructure now-unmanageable debts.
The Colorado-based company, formed from the 2011 combination of Eternal Energy Corp. and American Eagle Energy Inc., develops wells in oil-shale formations in the Williston Basin in North Dakota and Montana, according to its website.
It listed $215.2 million in debt and $211.9 million in assets in its Chapter 11 filing May 8 in Denver.
American Eagle announced in November that it would suspend its drilling until prices improved. West Texas Intermediate crude, the U.S. benchmark, in the $70 -$80 range then, has since fallen further.
Last week, oil rebounded from a six-year low in March amid speculation record U.S. output from shale will slow as companies reduce exploration. But the rally faltered, as West Texas Intermediate for June delivery dropped 33 cents to $59.06 a barrel in electronic trading on the New York Mercantile Exchange at 12:16 p.m. London time.
Increased production and weakening demand has pushed a number of oil exploration and service companies into bankruptcy. In March alone, Quicksilver Resources Inc., Dune Energy Inc., Cal Dive International Inc. all sought Chapter 11 protection.
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Copyright 2017 Bloomberg News.
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