Pacific Exploration & Production Corp (PRE.TO) and its units filed for protection from creditors in Canada after failing to cope with a prolonged slump in oil prices.
The Toronto-based company missed an interest payment due on March 28, making it the first Toronto-listed oil and gas company in the past one year to delay a payment.
Pacific Exploration reached a deal with debt-holders, including Canadian private equity firm Catalyst Capital Group, last week to convert almost all of its debt to equity.
The company, formerly known as Pacific Rubiales Energy Corp, said on Wednesday it had filed for creditor protection under the Companies’ Creditors Arrangement Act, an insolvency law in Canada that allows companies to restructure their finances and stay in business.
Pacific Exploration also said it planned to file for protection under Chapter 15 of the U.S. Bankruptcy Code at a later date.
Under U.S. bankruptcy laws, Chapter 15 grants a foreign company protection from creditors looking to seize its assets in the country.
The Toronto Stock Exchange suspended the trading of the company’s shares last week. Until then, the stock had lost 65 percent since December 17, when the company said lenders had formed a committee to negotiate the terms of a credit agreement.
Update: Pacific Exploration announced this week that its shares will be delisted from the Toronto Stock Exchange effective at the close of market on May 25th.
(Reporting by Arathy S Nair in Bengaluru; Editing by Saumyadeb Chakrabarty)
(This story has been edited by Kirk Falconer, editor of PE Hub Canada)
Photo courtesy of Reuters/Jose Miguel Gomez