Whiting has more than $585 million of cash on its balance sheet and will “continue to operate its business in the normal course without material disruption to its vendors, partners or employees,” the company said in a statement.
“Whiting currently expects to have sufficient liquidity to meet its financial obligations during the restructuring without the need for additional financing.”
Oil prices sank 66% in the third quarter, the largest drop since figures were available for 1983, according to Dow Jones.
Whiting has formed a restructuring plan that “would significantly reduce the company’s debt and establish a more sustainable capital structure pursuant to a consensual chapter 11 plan of reorganization,” the company said.
It already has negotiated an agreement with some of its noteholders.
The plan includes a plank giving existing shareholders 3% of the reorganized company’s equity.
It also involves “de-leveraging of the company’s capital structure by over $2.2 billion through the exchange of all of the Notes for 97% of the new equity of the reorganized company ,” the statement said.
In addition, the plan includes “payment in full in cash and/or refinancing of the company’s revolving credit facility” and full cash payment for other secured creditors, tax and other priority claimants, and employees, the company said.
At last check, Whiting shares stood at 59 cents in premarket trading, down 12%. The stock dove 91% in the third quarter.