On Thursday, Swift Energy Co. became the 40th oil producer in North America, 20th in Texas, to file for bankruptcy after suffering the severe decrease in crude prices.
The 37-year-old company listed about $1.35 billion in debt in total. Its third-quarter revenue dropped 55 percent from same period the prior year, and it posted a $354.6 million net loss from July to September, mostly because it had to undervalue its oil and gas properties.
Lenders cut $45 million from Swift’s usual $375 million borrowing in November. In addition, the Houston driller had to cut 60 percent of its capital budget, layoff 20 percent of staff, and reduced its office space to cope with the decline in the U.S. crude prices over the past 19 months. However, Swift is running out of financial options.
“The recent collapse in oil prices is among the most severe on record,” Dean Swick, Swift’s chief restructuring officer and a restructuring consultant at Alvarez & Marsal, said in court filings. “Independent exploration and production companies like Swift have been particularly hard hit because they rely primarily on sales of oil and gas to generate revenue.”
Swift has agreed with its creditors to convert its senior debt to equity pending bankruptcy court approval.
Article written by HEI contributor Aliyah Cole.