Templar Energy, an oil and gas driller, filed for Chapter 11 bankruptcy protection on June 1, 2020 in the Delaware Bankruptcy Court, becoming the latest mega energy company to waive the white flag after a precipitous drop in commodity prices over the last several months.
In a declaration filed with the Delaware Bankruptcy Court, Chief Executive Officer Brian Simmons stated that since February, “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”.
Driving the bankruptcy filing are outstanding funded debt obligations of approximately $426 million that mature in September 2020. Lenders have agreed to provide $25 million in funding to keep it operational in the Chapter 11 bankruptcy proceeding.
The company will use the bankruptcy process to effectuate a sale of its assets.
There have been a wave of bankruptcy filings by oil and gas companies throughout the United States, including Whiting Petroleum and Diamond Drilling, which filed in April 2020 in the Southern District of Texas.
Templar focuses on the development and acquisition of crude oil and natural gas reserves in the Greater Anadarko Basin of northeastern and western Oklahoma and the Texas Panhandle.
As of May 2020, it was producing about 18,000 barrels of oil equivalent per day. This is down from 21,000 in December 2019. Stay tuned for updates on this bankruptcy proceeding.
The Debtors are represented by the law firm of Young Conaway Stargatt & Taylor, LLP.