Oasis Petroleum (NASDAQ:OAS) is voluntarily entering chapter 11 bankruptcy protection as it looks to reduce its debt.
Here’s what investors in OAS stock need to know about the Oasis Petroleum bankruptcy.
- The company notes that it is entering bankruptcy in hopes of reducing its total debt by $1.8 billion.
- That represents 100% of its senior unsecured notes and senior unsecured convertible notes.
- OAS expects to exit bankruptcy with $340 million in borrowings from its credit facility.
- It notes that it has acquired $450 million in debtor-in-possession financing to allow it to continue operations throughout the process.
- That includes continuing its current upstream and production operations.
- It will also allow the company to continue paying employees, vendors, and suppliers.
- Oasis Petroleum notes that the bankruptcy doesn’t affect Oasis Midstream Partners (NASDAQ:OMP) or any of its subsidiaries which it has an equity interest in.
- The company attributes the need for bankruptcy restructuring to falling oil and gas prices, as well as the effects of the novel coronavirus on the economy.
- The company is looking to move through the bankruptcy process quickly an hopes to exit it sometime in November 2020.
Thomas Nusz, president and CEO of Oasis Petroleum, said the following about the bankruptcy news.
“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.”
OAS stock was down 30.2% as of Wednesday afternoon.
On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article.