ATP Oil & Gas Corp. filed for Chapter 11 bankruptcy protection, blaming costs and drilling cuts stemming from the 2010 Gulf Coast oil spill.
The Houston oil and gas producer filed Friday in the U.S. bankruptcy Court for the Southern District of Texas. It said it expects business at its oil and gas operations to continue as usual while it restructures.
In addition, the company said its lenders have agreed to provide $617.6 million in debtor-in-possession financing that will fund its day-to-day operations, including its payroll and health care obligations, while it restructures.
The financing, which remains subject to court approval, also will allow the company to pay its suppliers in full for any goods or services received after the filing, ATP said.
ATP said that the shutdown of drilling activities in the Gulf of Mexico following the explosion and massive spill at a BP PLC well kept it from bringing to production six development wells in 2010 and early 2011 that would have significantly boosted its production. Three of those wells have still yet to be drilled.
ATP said that if it had been allowed to drill and complete the wells, the increased production over the past few years would have substantially boosted its cash flows and shareholder value. It also would have allowed it to avoid entering into costly financing agreements, the company said.
ATP’s shares have swung wildly over the past five years, going as high as $57 in the halcyon days of late 2007 before plummeting to near $3 in spring 2009, the depths of the financial crisis. Since the beginning of this year, the shares have tumbled from $7.36 to just 46 cents at Friday’s close.
News of Friday’s filing sent ATP shares down 15 cents, or 33 percent, to 31 cents in Monday afternoon trading, after dropping as low as 20 cents earlier in the day..