(The Daily Advertiser) – Stone Energy has announced steps toward filing for Chapter 11 bankruptcy protection by Dec. 9, the company said in an issued statement.
Spokeswoman Jennifer E. Mercer said Friday that Stone, burdened with some $850 million in debt during a lingering downturn in energy prices, will sell its holdings in Appalachia for $350 million and has made agreements with senior bondholders, creditors and others to restructure operations.
“The company will continue to work,” Mercer said. “Stone is open for business and operating. People are showing up and working and getting paid; customers are being served. This will have no impact on day-to-day business.”
Mercer said the company has developed a pre-packaged reorganization plan, which should help Stone navigate Chapter 11 proceedings and “come out on the other side,” perhaps as early as mid-2017.
“The execution of the RSA is the culmination of months of hard work to right-size our balance sheet in response to a sustained period of low oil and natural gas commodity prices,” Dave Welch, Stone’s chairman, president and CEO said in an issued statement late Thursday. “The agreement with our note holders will provide value to all of our stockholders, improves our liquidity and better positions us to be profitable during a historically difficult time in our industry.
“Importantly, this agreement will allow all stakeholders to share in potential valuation growth if commodity prices improve.”
Stone is an independent oil and gas exploration and production company. Though headquartered in Lafayette, it has additional offices in New Orleans, Houston and Morgantown, West Virginia.
The company’s strategy, as revealed on its web site, has been to grow oil reserves in deepwater Gulf of Mexico and onshore oil; grow gas reserves in Appalachia and the Gulf of Mexico basin; and maintain stable Gulf of Mexico shelf oil production.
Like other exploration and production companies, Stone has suffered since oil prices plunged from over $100 a barrel in mid-2014 to as low as $26 a barrel in February.
By late Friday morning, Stone’s stock prices had slipped 30 percent to $6.74.