Stone Energy is taking steps toward filing for Chapter 11 bankruptcy protection by Dec. 9, the company announced in a statement.
Spokeswoman Jennifer E. Mercer tells The Advertiser that Stone, burdened with more than $1 billion in debt during a lingering downturn in energy prices, will sell its holdings in Appalachia for $350 million and has made agreements with senior bondholders, creditors and others to restructure its operations.
Mercer says the company and other parties involved have developed a prepackaged reorganization plan, which should help Stone navigate Chapter 11 proceedings and “come out on the other side,” perhaps as early as mid-2017. The agreement would relieve the company of some $850 million in debt and reduce its annual interest payments by $46 million.
“The company will continue to work,” Mercer says. “Stone is open for business and operating. People are showing up and working and getting paid; customers are being served. This will have no impact on day-to-day business.”
Mercer was uncertain where Stone would file for Chapter 11 protection.
Stone is an independent oil and gas exploration and production company. Though headquartered in Lafayette, it has additional offices in New Orleans, Houston and Morgantown, West Virginia.
Like other exploration and production companies, Stone has suffered since oil prices plunged from over $100 a barrel in mid-2014 to as low as $26 a barrel in February. Oil was selling at about $50 a barrel this afternoon.
