Erin Energy files for Chapter 11
- Business & Finance
Houston-based oil company Erin Energy and certain of its subsidiaries have filed voluntary petitions under Chapter 11 of the U.S. Code in the Bankruptcy Court for the Southern District of Texas, Houston Division to pursue a plan of reorganization.
Erin Energy said on Wednesday it would continue to operate under the jurisdiction of the court and in accordance with the applicable provisions of the code and the orders of the court.
To assure ordinary operations, Erin Energy is seeking approval from the bankruptcy court for a variety of motions, including authority to maintain bank accounts and other customary relief. Erin is in the process of looking for a source of debtor in possession financing to provide it with the necessary working capital to continue its operations and move towards a successful reorganization plan.
Subject to the approval of the court, the company plans to file a reorganization plan with the court in the near term with a goal to work expeditiously with all parties involved to put together a plan that will result in Erin Energy’s emergence from Chapter 11 as soon as practically possible.
Femi Ayoade, Erin Energy’s CEO commented, “We will work diligently with all parties involved to complete the restructuring as quickly as possible so as to restructure all of the company’s debt obligations in order to achieve financial stability and re-position Erin Energy with a strengthened liquidity position to execute on our extensive asset development opportunities.”
Ayoade added: “The company recently successfully drilled a discovery well in the Miocene formation in its offshore Nigeria licenses on a structure that independent analysis estimates could hold over a billion barrels of reserves. In The Gambia, Erin Energy holds a 20% interest in blocks A2 & A5 containing potentially, according to its operator, over 800 million barrels of reserves. A well will be drilled there in the 4th quarter of this year and the company is being carried and has no obligation to fund that well.”
When talking about Gambian operations, Ayoade was referring to an upcoming exploration well on the Samo prospect for which its partner and oeprator, FAR Limited, recently hired a Stena Drilling-owned drillship.
Erin also said that work is in progress in Ghana to acquire a marine 3D seismic survey later this year. The newly acquired 3D data will be used for the appraisal well drilling and development planning.