California's Largest Oil Company, California Resources, Filed For Bankruptcy
California Resources, the state's largest oil company, said it filed for bankruptcy to conduct a planned debt restructuring, mostly related to a separation from Occidental Petroleum Corp.
The Los Angeles-based Corporation has joined the ranks of American energy companies stranded by falling oil prices.
The application under article 11 of the US Bankruptcy Code is filed in a court in Houston.
California Resources said in a statement that a group of creditors agreed to provide the company with $1.1 billion in funding to help it survive bankruptcy proceedings. Creditors also support a $450 million share issue and a $200 million loan to ease the company's exit from bankruptcy.
In June, the American producer of shale oil and gas Extraction Oil & Gas declared bankruptcy, which went to court to start the corresponding procedure, having failed to pay interest on the debt on time. In early April, Whiting Petroleum, one of the largest companies conducting hydraulic fracturing operations, filed for bankruptcy.
California Resources was spun off from Occidental Petroleum in 2014. Like many other American oil companies, it faced serious difficulties amid a sharp drop in oil prices in the context of the coronavirus pandemic. In May, the company was forced to cut production, as were many of its competitors.
California Resources is primarily engaged in traditional oil and gas production, although it also owns shale sites. In 2019, it received revenue of $2.6 billion.