From The Denver Business Journal:
Nine months after a federal bankruptcy judge signed off on a restructuring plan for Denver oil and gas company Venoco Inc., the company is back in bankruptcy court.
Venoco, which focuses on operations offshore of southern California, filed a Chapter 11 petition today in U.S. Bankruptcy Court in Wilmington, Delaware — but this time restructuring isn’t in the cards, the company said.
Venoco’s announcement about the Chapter 11 filing said, “The company’s assets are expected to be sold or wound down through the bankruptcy process.”
All of Venoco’s 110 employees will ultimately lose their jobs, the company said in a statement.
Venoco said it’s already returned “quitclaimed,” or returned its leases to the state, for its operations the South Ellwood Field offshore of Santa Barbara County. The state has reached an agreement to have Venoco maintain the assets until the state — which will be responsible for decommissioning the operations — finds another operator to shut things down, Venoco said.
Venoco said those leases will now become a part of California’s marine sanctuary.
The company said its wells in Beverly Hills halted production at the end of 2016, when those leases were terminated. Venoco said it will meet this week with officials from the city and school district in Beverly Hills to “address a long-term plan for the safe transition of responsibilities at the site.”
Venoco said its second trip through bankruptcy court is due in part to the ongoing closure of Line 901, a pipeline owned by Plains All American Pipeline (NYSE: PAA), which ruptured in May 2015 and spilled oil into the waters off the coast of California.
The pipeline’s shutdown two years ago also shut in more than 50 percent of Venoco’s production and Venoco said the restart date for the pipeline “is uncertain.” Lawsuits have been filed over the breach.
Working with regulators
“Today’s filing is the result of unfortunate circumstances impacting the company’s financial strength, including the ongoing closure of Plains All American Pipeline’s Line 901,” said Mike Wracher, Venoco’s COO, in the company’s bankruptcy announcement Monday.
“We have pursued a number of market-based and regulatory solutions to address these challenges during the last year. Despite these considerable efforts, our financial position now compels us to take this action,” Wracher said.
The Chapter 11 bankruptcy petition estimated the company’s assets at between $10 million and $50 million. Liabilities were estimated at between $50 million and $100 million.
Venoco said it’s working with regulators and stakeholders to “ensure the safe transition or wind-down of its assets throughout the bankruptcy process.”
Business will continue day to day for employees, vendors and customers, the company said.
The Chapter 11 filing listed as major shareholders Apollo Credit Opportunity Trading Fund III, which owns 30.16 percent of the company, Apollo Investment Corp., which owns 23.17 percent of the company, and AST OC I Master Fund LP, which owns 13.91 percent of the company.
In March 2016, the company filed for bankruptcy protection to get rid of $1 billion of debt from its balance sheet and it said in July 2016 that the court had approved its plan and eliminated that debt.
The company said at the time it believed that better days were ahead.
“The low price of oil and the ongoing closure of Plains All American pipeline 901 continue to be serious problems. With this restructuring, Venoco is in a much stronger position to withstand these challenges and others that may follow,” Venoco’s then-CEO Mark Depuy said in July 2016.
