Triangle USA Petroleum, Oil and Gas Explorer, Files Bankruptcy

(Bloomberg) - Triangle USA Petroleum Corp., an oil and gas explorer working one of the largest shale oil reservoirs in North America, filed for bankruptcy with a plan to restructure that will keep its parent company out of Chapter 11.

Triangle USA is active in the North Dakota and Montana regions of the Williston Basin, where it uses horizontal drilling and hydraulic fracturing. The company and its affiliates fell victim to the price slump that began in 2014, and bankruptcy proceedings were started “with the objective of realigning their capital structure with new market realities,” Chief Restructuring Officer John Castellano said in papers in Delaware federal court.

After several months of negotiations, the company reached an agreement with holders of 73 percent of its senior unsecured notes and plans to get out of bankruptcy by converting the debt into equity in a new, restructured business.

Parent Triangle Petroleum Corp. and an oilfield services affiliate, RockPile Energy Services LLC, weren’t included in Wednesday’s Chapter 11 filing. They and the bankrupt unit intend to keep operating, while a subsidiary that ceased operations this year, Ranger Fabrication LLC, was included in the bankruptcy case and will wind down under court protection.

Debt, Plan

As of the bankruptcy, Triangle USA had more than $689 million in long-term debt, including $308 million in a reserve-based revolving credit facility and $381 million in 6.75 percent 2022 senior unsecured notes. Those notes will be converted into equity and a new money rights offering for $100 million will be backstopped by participating noteholders, according to a company statement.

The arrangement still needs court approval and Triangle USA will keep negotiating with bank lenders in its senior reserve-backed facility and parties with which it has midstream agreements, including affiliates of joint venture Caliber Midstream Partners LP, according to the statement.

Triangle Petroleum, initially based in Calgary and focused on oil and gas interests in Canada, moved to Denver and began work in the Williston Basin after a management change in 2009, according to court papers. Its first well was drilled there in 2011, and over the next three years, business expanded quickly as it bought interests from Kodiak Oil & Gas, Marathon and other companies, it said in court papers.

The company says it has more than adequate liquidity to fund its operations during the restructuring and, at the time of the filing, had about $88 million in cash and cash equivalents.

The case is In re Triangle USA Petroleum Corp., 16-11566, U.S. Bankruptcy Court, District of Delaware (Delaware).

To contact the reporter on this story: Tiffany Kary in New York at tkary@bloomberg.net To contact the editors responsible for this story: Andrew Dunn at adunn8@bloomberg.net Faris Khan

Copyright 2016 Bloomberg News.

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