The offshore oil and gas producer Energy XXI bankrupted due to the prolonged oil price drop. The company submitted Chapter 11 bankruptcy protection, but will continue operations in Gulf of Mexico projects under court-supervised restructuring for the benefit of its creditors. The offshore oil and gas producer Energy XXI failed to complete cost reduction program, due to increasing net debts, low liquidity and cash flows, all caused by the record low oil prices. The company has around 180 million USD in cash plus funds from ongoing operations, which will allow operations and will enable it to carry on functioning.
According to the Chapter 11 bankruptcy protection, Energy XXI would erase around 2.8 billion USD in debt from its balance sheet and will have restructuring of its operations. The company will continue with paying vendor, royalty, and surety obligations on a go-forward basis in the ordinary course of business. Energy XXI expects to maintain compliance with its existing long-term plan with the Bureau of Ocean Energy Management throughout the restructuring process.
Energy XXI was formed in 2005 with a successful 300 million USD IPO on the London Stock Exchange Alternative Investment Market (AIM). The company is operating as shallow water driller in the Gulf of Mexico. Energy XXI is the latest in a series of heavily indebted oil firms to head for the bankruptcy route because of the precipitous decline prices the past two years.