Oasis Petroleum Files Chapter 11

Oasis Petroleum Inc. (NASDAQ: OAS) has revealed that it has filed voluntary petitions for reorganization under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas.

The company announced that it has entered into a restructuring support agreement with all of its lenders in its revolving credit facility and holders of 52 percent of the aggregate principal amount of the company's bonds on a comprehensive “pre-prepackaged” restructuring plan. The business filed for Chapter 11 to implement the plan, which aims to strengthen Oasis Petroleum’s balance sheet and significantly reduce its debt.

Through its financial restructuring, Oasis Petroleum intends to reduce its total indebtedness by $1.8 billion, representing 100 percent of its senior unsecured notes and senior unsecured convertible notes. Upon emergence, the company said it expects to have approximately $340 million of borrowings under the Oasis Petroleum credit facility. 

It is expected that the restructuring process will be completed on an accelerated timeframe allowing for an emergence in November, subject to court approval. Oasis Midstream Partners (NASDAQ: OMP), an independent legal entity operated as a Master Limited Partnership, and all subsidiaries in which it owns an equity interest, are not included in Oasis Petroleum's Chapter 11 proceedings.

“Oasis Petroleum is a great company with high-quality assets and employees and a well-earned reputation for excellence in environmental stewardship, safety and governance,” Oasis Petroleum’s chairman and chief executive officer, Thomas B. Nusz, said in a company statement.

“However, due to historically low global energy demand and commodity prices, we determined that it is best for Oasis Petroleum to take decisive action to strengthen our liquidity and overcome the headwinds now challenging both our company and industry,” he added.

“We are confident that we are taking the right steps to position the business for long-term success. We thank our lenders and noteholders for their support, which reflects their confidence in our business and our team, and which will allow us to move quickly through the court-supervised process,” Nusz went on to say.

The following entities are included in Oasis Petroleum’s Chapter 11 filing:

• Oasis Petroleum Inc.
• Oasis Petroleum LLC
• Oasis Petroleum North America LLC
• Oasis Well Services LLC
• Oasis Petroleum Marketing LLC
• Oasis Petroleum Permian LLC
• OMS Holdings LLC
• Oasis Midstream Services LLC and
• OMP GP LLC

The following entities are not included in the filing:

• Oasis Midstream Partners LP and subsidiaries
• OMP Operating LLC
• Bobcat DevCo LLC
• Beartooth DevCo LLC
• Bighorn DevCo LLC
• Panther DevCo LLC

Oasis Petroleum describes itself as an independent exploration and production company focused on the acquisition and development of onshore, unconventional crude oil and natural gas resources in the United States. Headquartered in Houston, Texas, the company was founded in 2007 by Nusz and Taylor Reid.

To contact the author, email andreas.exarheas@rigzone.com