Venoco Files for Bankruptcy
The Colorado-based company Venoco has filed for bankruptcy.
Venoco cited continued financial strain from the 2015 California pipeline spill in its statement regarding the company’s restructuring. The May 19 Plains All American Pipeline spill in Santa Barbara released up to 3,400 barrels of crude causing damage to marine wildlife and polluting nearly 100 miles of beach.
Venoco was using the pipeline which has been shutdown since the spill, halting production at the company’s South Elwood Field located about two miles off the coast of Santa Barbara.
The company stated it has reached an agreement with its senior lenders to reduce the company’s debt load and restructure the balance sheet. Under the terms of the agreement, these lenders have agreed to support a restructuring transaction that will eliminate approximately $1 billion of debt from Venoco’s balance sheet.
To facilitate this financial restructuring, Venoco has filed a voluntary petition for reorganization under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware.
“Today’s announcement represents another significant step in our ongoing efforts to address the challenges before us and position the company for long-term success,” said Mark DePuy, Venoco’s CEO. “After carefully evaluating our options, we have determined that the agreement to restructure our balance sheet and reduce our debt represents the best way to strengthen our finances and position ourselves for the future.
“While we continue to be in a strong cash position, the declining price of oil and the ongoing closure of Plains All American pipeline 901 continue to be serious problems. With this agreement, Venoco will be in a much stronger position to withstand these challenges and others that may follow,” DePuy continued.
“Both during and after this process, Venoco will maintain the same commitment to safety, environmental protection and the communities in which we operate. Venoco is and continues to be a remarkable company with award winning operations, excellent employees, and robust energy-producing assets.”
The company has sufficient liquidity to continue its normal oil and gas activities and meet its ongoing financial and regulatory obligations.
Venoco founder Tim Marquez will remain Executive Chairman during the restructuring process. The company’s senior lenders have retained him to provide leadership and strategic counsel to the company after the company emerges from restructuring.
“I truly love the company we built in and around Santa Barbara County and its community,” said Marquez. “It is the employees of Venoco that live in and contribute to the community that make Venoco a great company. It is unfortunate that a third party pipeline spill has impacted Venoco, but this process will make it stronger and ensure its continued contributions to the Santa Barbara County community. This process will significantly strengthen the financial wherewithal of an already great operational Company. I am especially proud that Venoco, directly and indirectly, has donated close to $150,000,000 to communities where it does business. I look forward to being a part of its success going forward.”