Archive for August, 2015

Samson Resources Likely to File for Chapter 11 at the U.S. Bankruptcy Court

Friday, August 14th, 2015

Samson Resources Inc. – a gas and oil producer – has reported it will be filing for Chapter 11, at the U.S. bankruptcy court, around mid-September this year. The natural resources provider has become the latest victim of a nationwide energy crisis that keeps driving down the prices. As a result, the company will be handing over its ownership of the company to its lender.

On Friday, Samson Resources Inc. sat down with the creditors to develop a strategy to restructure the company. The board members from both parties agreed to the restructuring and came up with a plan. Even with the plan, equity firm KKR, which conducted the merge of Samson Resources Inc. back in 2011 for a staggering $7.2 billion, will still receive a huge blow.

Samson is among other big companies which also sought the protection of bankruptcy during this difficult energy crisis. All companies are feeling the strain of the decreasing prices and supplies. The prices for U.S. crude oil have come down around 50% since the last year and the supply of natural gas has drastically decreased.

Samson Resources Inc. has suffered the loss of around $4.5 billion since its buyout in 2011. By filing for Chapter 11 in bankruptcy protection, the deal will also allow second-lien creditors to take control of the company, and receive a $125 million in the form of new loans. Bondholders of the company will also provide another $500 million, which should help payoff Samson’s loans and also put the company’s finances back on track.