SandRidge Energy files for Chapter 11 bankruptcy

SandRidge Energy has joined scores of energy companies seeking refuge from the oil crash in bankruptcy court, becoming one of the largest U.S. shale drillers to succumb to the downturn.

The Oklahoma City oil company is seeking Chapter 11 bankruptcy protection with a plan in place to turn $3.7 billion in debt to stock, it said Monday. It has about $4 billion in debt and $7 billion in assets, according to court papers.

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The firm, which has about 800 employees, plans to put up its oil and gas reserves as collateral for a $425 million loan and acquire another $300 million in debt that will at some point convert to equity. It said it would have enough capital to keep running its oil and gas operations, which are mainly in Oklahoma and Texas.

“The new capital structure will allow the company to concentrate on oil and gas exploration and development in our active Oklahoma and Colorado project areas,” Sandridge CEO James Bennett said in a written statement.

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SandRidge’s filing comes as U.S. energy bankruptcies are accelerating, and it brings the number of North American oil company bankruptcies since the downturn began to 74, according to Dallas law firm Haynes & Boone.

California-based driller Breitburn Energy Partners also filed for Chapter 11 bankruptcy protection on Monday, listing $3.4 billion in debt. Last week, Houston’s Linn Energy filed the biggest oil and gas bankruptcy since the downturn began with $8.3 billion in debt. Houston-based producers Energy XXI, Ultra Petroleum, Goodrich Petroleum and Oklahoma’s Midstates Petroleum have also filed bankruptcy papers recently.

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In 2014, Breitburn bought Houston-based QR Energy shortly before the oil bust began. The deal made Breitburn one of the largest energy explorers that was structured as a master limited partnership. However, the acquisition left Breitburn with a a lot of debt just as oil prices began to plummet. Breitburn’s stock has traded under $1 a unit for most of 2016.