Extraction Oil & Gas, a US shale oil and gas producer, filed for bankruptcy. The reason for the bankruptcy was the collapse in oil prices. In this regard, the company went to court to initiate proceedings in accordance with Section 11 of the United States Bankruptcy Code. It is reported that the manufacturer was unable to pay interest on the debt on time.
This is the second largest company in the United States, which went bankrupt during the crisis after the March collapse of the oil market, caused by the decision of Saudi Arabia to increase oil production, despite the drop in demand due to the coronavirus pandemic.
Whiting Petroleum, one of the largest hydraulic fracturing companies, announced its bankruptcy earlier.
According to the head of Extraction, Matt Owens, after studying all the options, the corporation’s management concluded that “voluntary bankruptcy in accordance with Article 11 with the support of our key creditors is the best way out for us.” The company warned investors about a possible closure in May, noting a reduction in investment. However, the statement, according to the head, did not impress investors who considered that the situation would only affect the decline in the company’s production and its cash flow.
Extraction was founded in 2012, four years later, in 2016, the management held the largest IPO after the collapse of oil prices in 2014. The company’s capitalization after the IPO reached $ 4 billion, but currently it is just over $ 88 million.