WASHINGTON (dpa-AFX) - Delta Petroleum Corp. (DPTR) said Friday that the company and certain of its subsidiaries have filed for Chapter 11 bankruptcy protection. The oil and gas producer had said in early November that it would be forced to seek bankruptcy protection if it became unsuccessful in consummating a transaction that addressed its liquidity issues. Shares of the company are down 24 percent in pre-market trading.
The Denver, Colorado-based company, which filed for bankruptcy protection in the U.S. Bankruptcy Court for the District of Delaware, said it expects its current and future cash resources will be sufficient to pay its court expenses and maintain its business operations in the short-term.
The company will also seek court approval of a debtor in possession or DIP financing facility of $57.5 million arranged by it to address longer term liquidity needs as it works through the bankruptcy process.
Further, Delta Petroleum said it expects to receive bankruptcy court approval for a variety of other motions that it will file, including requests to pay employee wages, salaries and employee benefits, royalty interest owners, and vendors.
Shares of Delta Petroleum had plunged in extended trade on November 9 after the company reported a loss for the third quarter and said that any transaction it may reach to restructure its debt could be highly dilutive to existing shareholders. Further, the company had said it will be required to file for bankruptcy protection if it is not able to consummate a transaction that addressed its liquidity issues.
At that time, the company reported a third-quarter net loss of $429.43 million or $15.40 per share, compared to net income of $13.94 million or $0.49 per share in the year-ago period. Total revenues rose 31 percent to $16.55 million from $12.65 million in the prior-year quarter.
In July, Delta Petroleum said its board of directors engaged Macquarie Capital (USA) Inc. and Evercore Group, L.L.C. as advisors to look into strategic alternatives in a process aimed at maximizing shareholder value and dealing with 2012 debt maturities. However, the company said in November that it did not receive any definitive offer regarding an acquisition or additional financing.
DPTR closed Thursday's trading at $0.33, down $0.04 on a volume of 399,000 shares. In Friday's pre-market, the shares are losing $0.08 or 24.31 percent to $0.25.
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