Independent oil and gas producer Emerald Oil Co. (NYSEMKT: EOX) filed for bankruptcy Tuesday after markets closed. The company’s main area of operations is the Bakken shale play in North Dakota and Montana.
In its filing the company said it had received a “stalking horse” bid from Latium Enterprises, but neither Emerald nor Latium specified a bid price. Emerald said it has $20 million of debtor-in-possession financing available, pending the bankruptcy court’s approval.
The Latium bid is nonbinding and subject to a variety of terms, including Latium’s performance of certain due diligence analysis and successfully negotiating with Emerald mutually acceptable terms for the definitive agreements.
In its press announcement Emerald noted:
Like many other exploration and production companies, Emerald’s operations have been significantly impacted by the dramatic decline in oil prices, the continued low prices of oil and natural gas, and the general uncertainty in the energy markets. These macro-economic factors, coupled with Emerald’s substantial debt obligations, resulted in the Company’s decision to explore strategic restructuring alternatives to reduce its debt and achieve a sustainable capital structure. Over the last nine months the Company explored and presented multiple solutions to its lenders to solve the Company’s current financial condition, however the Company was unable to obtain the requisite lender consent. Emerald continues to evaluate and discuss alternatives with its stakeholders and believes that an in-court sale process will maximize value and position Emerald for future profitability.
Other independent oil and gas producers that have filed for bankruptcy include Magnum Hunter Resources, Samson Resources and Swift Energy.
Emerald’s stock traded up about 7% Wednesday afternoon, at $1.37 in a 52-week range of $0.39 to $19.00.