US shale producer Whiting Petroleum Corp on Wednesday said it had filed for Chapter 11 bankruptcy. Whiting, once North Dakota’s largest oil producer, became the first publicly-traded victim of the oil price crash. The company agreed with its creditors to exchange some of its notes for 97% of new equity to reduce debt by about $2.2 billion. Current shareholders will hold 3% of the restructured company.
Whiting’s shares plunged 47% to 36 cents each on Tuesday. Its market valuation has contracted to $32 million from a peak of $15 billion in 2011, As of December 31, the company’s debt stood at $2.8 billion, compared to its cash of just above $585 million.
Analysts said the US energy sector would likely report more defaults in the coming months. Callon Petroleum, Chesapeake Energy, Chaparral Energy, and Gulfport Energy have hired debt restructuring advisors or investment banks to shore up cash reserves.
