Oklahoma oil and gas producer Chaparral Energy filed for Chapter 11 bankruptcy protection on Sunday, the latest US energy sector casualty in recent months as weak oil prices due to the coronavirus pandemic result in cash crunch.
The company's assets and liabilities were in the range of $500 million to $1 billion, according to a court filing in the US Bankruptcy Court in Delaware.
Lenders have been reining in on credit for shale drillers and Chaparral's borrowing limit was recently reduced to $175 million from $325 million.
Reuters reported in March that the driller was working with debt restructuring advisers to shore up its cash position.
This is the second time the company has filed for bankruptcy protection. The last time was during the oil price slump in 2014-16, from which it emerged in March 2017.
In a separate filing on Sunday, the company's debtors said they started the Chapter 11 cases to implement a "prepackaged plan of reorganisation".
A trustee or examiner has not yet been requested and no committees have been appointed yet in the Chapter 11 cases, the court filing said.
Chaparral had in May warned of its ability to continue as a going concern amid a historic plunge in commodity prices and said it had hired legal and financial advisers.
In recent months, debt-laden major shale independents such as Chesapeake Energy and Whiting Petroleum have succumbed to one of the worst crises that the oil industry has faced. California Resources also filed for Chapter 11 after defaulting on interest payments.
A fall in economic activity due to the pandemic and a price war between top oil producers Russia and Saudi Arabia had resulted in crude dropping below $0 in April for the first time in history. Oklahoma City-based Chaparral had around $421 million of debt outstanding at the end of 2019.