Warren Resources Inc, an energy production company, filed for Chapter 11 bankruptcy protection on Thursday. According to a court filing, the company held operations in both California and Pennsylvania.
A major slump in oil prices has pressed a number of energy production companies to file bankruptcy since early 2015. Nearly a third of production companies could be at risk of bankruptcy if prices don’t increase, says one study by the consulting firm, Deloitte.
Warren Resources failed to make a $7.5 million interest payment when it was due back in February, and the company had to default on the loan just 30 days later.
Court documents list company assets totaling $230 million and debts of $545 million as of January 31.
Representatives of the company stated that it cut back capital expenditures as part of a cash management plan and was exploring the sale of some of the company assets.
In February, Warren Resources said it received word from Nasdaq that the market value of their shares was below the average market requirement.
Shares closed on Thursday at nearly 9.5 cents, down 27 percent. Just a year ago, the shares peaked at a 52-week high of 79 cents.
Article written by HEI contributor Briana Steptoe.