Another oil and gas company has filed Chapter 11 bankruptcy. The action was taken this week by Oklahoma City-based Templar Energy, the firm founded by David Le Norman who is chairman of the Oklahoma Petroleum Alliance.
The bankruptcy filing came this week in Delaware and followed an out-of-court restructuring the company did four years ago when it eliminated $1.45 billion in debt.
Templar had started a sale process in February and several other firms showed interest but this week, the company made the decision to go the route of Chapter 11 bankruptcy.
CEO Brian Simmons, in the court filing blamed the coronavirus pandemic and the oil crisis.
“The volatility in oil and natural gas markets has been exacerbated by the sudden combined impact of the COVID-19 pandemic and the oil price war between Saudi Arabia and Russia, with oil prices descending to the lowest level since 2002,” said Simmons.
“Independent oil and gas companies such as [Templar] have been especially hard-hit, as their revenues primarily are generated from the sale of unrefined oil, natural gas, and [natural gas liquids],” he added.
Templar has outstanding funded debt obligations of approximately $426 million that mature in September. Lenders have agreed to provide it with $25 million in funding to keep it operating in Chapter 11.
As Natural Gas Intelligence reports, Templar is “joining a growing list of distressed operators amid the sharpest oil market downturn in recent memory.”
Founded in 2012, Templar focused its drilling in the Greater Anadarko Basin of Oklahoma and the Texas Panhandle.
As of May 2020, it was producing about 18,000 barrels of oil equivalent per day (Mboe/d), down from 21,000 Mboe/d in December.