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A Listed American Oil Company Declared Bankruptcy

Some U.S. oil companies are facing multiple challenges such as "loan cutted". Another listed company in the oil industry recently declared bankruptcy after white Petroleum Corporation filed for bankruptcy protection earlier this month.


On April 15, local time, Yuma energy, listed on the NYSE, announced in a statement that it had filed Chapter 11 bankruptcy protection application with the Northern District Court of Texas in the United States, "in the first quarter of 2020, the company's cash situation deteriorated, and the cash flow generated by operation can no longer cover the expenses required by operation.".

Unlike Huaiding oil, Yuma energy failed to reach a restructuring agreement with its major creditors before filing for bankruptcy. For some time to come, the company will have to auction its assets publicly.

"The company intends to use bankruptcy proceedings to wind up its assets in an orderly manner. The company intends to obtain the court's consent as soon as possible to auction all its assets, including some assets in Louisiana, Texas, Wyoming and Ohio. The auction is expected to take place within the first 90 days after the court application is submitted. " That's what the April 15 statement said.

Its main creditor is Ye investment, an investment company under red mountain capital partners, an asset management company. In September 2019, the latter acquired all secured bank debt under Yuma energy, and both parties entered a period of negotiated restructuring.

But the two sides failed to reach a final agreement. "In 2019 and early 2020, we took positive measures to try to recapitalize the company's financial structure based on the credit agreement with Ye investment and the restructuring agreement with red mountain Capital Partners. Unfortunately, ye investment recently informed us that it decided to terminate the aforesaid credit agreement because the company failed to pay the loan interest in time and fulfill other relevant contracts, and ye investment required the company to accelerate the repayment of the loan principal and interest based on the credit agreement, so all the principal and interest under the credit agreement have become due and payable. At the same time of termination of the credit agreement, red mountain Capital Partners informed us of its decision to terminate the restructuring agreement. " Anthony suney said April 15.

Anthony suney is a former executive at Yuma energy. On April 10, 2020, he resigned from the post of interim CEO, interim CFO and chief restructuring officer of Yuma energy and joined the consulting company ankura, which was recently hired as a financial consultant by Yuma energy.

In fact, Yuma energy has been hit by other things besides the creditor "cut off" mentioned by Anthony suney. According to the preliminary documents submitted to the court by the reporter, the board of directors of the company believes that "the recent sharp drop in oil prices, the termination of credit agreements, the failure of oil well operations in its departments, and the uncertainty brought by the epidemic situation to the economy constitute the biggest problem that the company cannot continue to operate".

Yuma energy is a company that produces conventional and unconventional oil and gas, mainly in the Gulf Coast, West Texas basin and California. Before the bankruptcy, the company's debt was actually small. Court documents seen by reporters show that the scale of its debt is between $10 million and $50 million.

In a recent report, rystad energy, a market research institution in the field of energy in the United States, said that if oil prices remain at a low of $20 per barrel, 140 oil producers are expected to file for bankruptcy in 2020 and 400 in 2021.