Venoco files for Chapter 11 bankruptcy
Venoco, the Denver-based oil and gas company with substantial operations in the tri-county region, has filed a pre-packaged Chapter 11 bankruptcy after agreeing with lenders to slash $1 billion in debt.
Venoco said March 18 that it reached an agreement with its senior lenders on a restructuring agreement. The company earlier said it was suspending debt payments in order to negotiate better terms. The Chapter 11 reorganization filing was before the U.S. Bankruptcy Court in Delaware.
“Today’s announcement represents another significant step in our ongoing efforts to address the challenges before us and position the company for long-term success,” said CEO Mark DePuy.
Venoco has been buffeted by both the plunge in oil prices and the shutdown of Plain All American’s pipelines, which are the only way for the company’s output from offshore platforms on the South Coast to reach broader markets. The company earlier raised some $200 million in cash through the sale of Ventura County operations but the pipeline break and falling oil prices hurt cash flow.
“While we continue to be in a strong cash position, the declining price of oil and the ongoing closure of Plains All American pipeline 901 continue to be serious problems,” DePuy said. The company said in a statement that is has “sufficient liquidity” to maintain normal operations.
Venoco said that founder Tim Marquez will remain executive chairman during the restructuring process. The company said he will “provide leadership and strategic counsel to the company after the company emerges from restructuring.”
Marquez helmed the company through a public stock offering but his family became its sole owner in a go-private transaction. The company did not state whether Marquez would retain any ownership stake after the Chapter 11 restructuring.
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