Sabine Oil & Gas Corporation said Wednesday that it has filed Chapter 11 bankruptcy.
The Houston-based company filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of New York to facilitate the restructuring of its balance sheet.
Sabine said it “continues to engage in constructive discussions with its lenders and debt holders regarding the terms of a consensual financial restructuring plan and is focused on achieving a resolution as expeditiously as possible.”
Sabine president and CEO David Sambrooks said the company fully expects to continue ordinary operations during the restructuring process.
“The actions we are announcing today represent an important step forward in our efforts to strengthen the Company’s capital structure. Following a comprehensive review of our alternatives, the Board of Directors and management team determined that this process would produce the best outcome for Sabine and its stakeholders,” Sambrooks said.
The company expects that its cash on hand, combined with funds generated from ongoing operations, will provide sufficient liquidity to support the business during the balance sheet restructuring process.
Saine said its operations have been “significantly impacted” by the oil price rout that began last summer, continued low prices of natural gas and general uncertainty in the energy market.
“These macro-economic factors, coupled with Sabine’s substantial debt obligations, resulted in the company’s decision to explore strategic restructuring alternatives to reduce its debt and achieve a sustainable capital structure,” the company said.
Sabine added that it is continuing to evaluate and discuss alternatives with its stakeholders and “believes that its in-court financial restructuring will position it for profitability and long-term success.”