Low oil prices have led Sampson Resources to file for bankruptcy

Posted on Tuesday, September 22nd, 2015 at 7:02 pm    

Samson Resources Corp., a business under KKR & Co., filed for Chapter 11 bankruptcy after low oil and gas prices caused sweeping debts for the company. The corporation expects to restructure $3.25 billion worth of debt. In the proposed plan, the junior lenders of Samson Resources would be given equity in the company. These junior lenders include investment firms such as Silver Point Capital LP, Cerberus Capital Management LP, and Anshutz Investment Co. Each firm would forgive $1 billion in debts for equity in the oil and gas company while also giving up to $485 million additional loans. Samson Resources stated that 68 percent of junior lenders are in favor of the plan.

This year has seen severe drops in oil prices with the price of a barrel threatening to fall below $40. Fitch Ratings reports that the default rate for U.S. energy companies is at the highest level since 1999 at nearly 5 percent. The total debt for oil and gas companies is estimated at about $10.4 billion. Samson Resources is only one of six energy companies to default within the past six weeks alone.

Bankruptcy is a serious financial decision for a company to consider. If your business is experiencing significant debt and would like to discuss bankruptcy options with a talented and experienced bankruptcy attorney, contact the Bradford Law Offices, PLLC. Bankruptcy may be a highly beneficial option for your company to get back on its feet. Call (919) 758-8879 today to discuss your situation with a member of our team.