HOUSTON – Swift Energy Co. has become the latest U.S. shale driller to succumb to the brutal downturn in crude prices, seeking Chapter 11 bankruptcy.
The Houston driller filed paperwork on Thursday to become the 40th North American oil producer prodded into bankruptcy court as crude exporters Russia and Saudi Arabia keep prices depressed by pumping crude all-out, jockeying for a bigger corner of the global oil market. It was the 20th driller headquartered in Texas to file for bankruptcy in the past year.
Swift Energy, founded in 1979 by Aubrey Earl Swift, had trimmed 60 percent of its capital budget, cut 20 percent of its workforce and reduced its office space to cope with the 68-percent slide in U.S. crude prices over the past 19 months. But like several small rivals, Swift is running out of financial levers to pull.
“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.”
In a restructuring deal subject to bankruptcy court approval, Swift has agreed with its creditors to convert its senior debt to equity. Company officials were not immediately available for comment on Saturday.
Swift, which pumps oil in the Eagle Ford Shale in South Texas and in Louisiana fields, listed about $1 billion in assets and $1.35 billion in debt. The company’s third-quarter revenues sank 55 percent from the same period the prior year, and it posted a $354.6 million net loss from July to September, mostly because it had to write down the value of its oil and gas properties. In November, lenders cut $45 million from Swift’s $375 million borrowing base. The company said it has 228 employees.
Swift’s bankruptcy filings followed Magnum Hunter Resources Corp.’s Chapter 11 petition in December.