Sabine Oil & Gas Corporation announced Wednesday that it has filed for bankruptcy in order to facilitate the restructuring of its balance sheet.
The company is currently in “constructive discussions” with its lenders and debt holders regarding the terms of a consensual financial restructuring plan and is focused on “achieving a resolution as expeditiously as possible”, according to a Sabine press release. Sabine Oil & Gas expects that its cash on hand, combined with funds generated from ongoing operations, will provide sufficient liquidity to support the business during the balance sheet restructuring process.
Commenting on the latest development, Sabine President and Chief Executive Officer David Sambrooks said in a company statement:
“The actions we are announcing today represent an important step forward in our efforts to strengthen the company’s capital structure. Following a comprehensive review of our alternatives, the board of directors and management team determined that this process would produce the best outcome for Sabine and its stakeholders. Undertaking this process provides an orderly path forward to better align the company’s balance sheet with changing market dynamics.
“We remain committed to maintaining operational excellence and executing within our current strategy and importantly, we fully expect to continue operating in the ordinary course. We want to thank our employees for their continued dedication during this time as well as our service providers and suppliers for their ongoing support. We intend to emerge with increased financial flexibility and a sustainable capital structure that will enable us to devote capital to grow our business.”
The news follows Sabine’s announcement last month that it would be deferring a $21 million interest payment.