Fieldwood Energy filed for chapter 11 bankruptcy on the same day it announced that it is acquiring Noble Energy’s Gulf of Mexico assets for $700 million, the Houston Chronicle reports.
The bizarre dichotomy is part of Fieldwood’s plan to cut its debt in half, receive an influx of capital from its private equity backers, exit bankruptcy in April and start expanding in the slowly recovering deepwater Gulf, the newspaper says.
Noble’s deepwater Gulf assets already are developed, so they won’t require a lot of new capital spending after they’re acquired by Fieldwood. The existing wells can continue to churn out cash flow, says Michael Scialla, an energy analyst at St. Louis-based investment banking firm Stifel Financial.
“This is extremely unusual, but maybe from that standpoint it makes sense for a financially stressed company,” Scialla says.
