Linn Energy files for bankruptcy protection

US independent oil and gas company Linn Energy yesterday filed for bankruptcy protection, becoming the largest oil and gas driller to file for Chapter 11 due to low energy prices.

Linn has become the 60th US oil firm to go bankrupt since oil prices started crashing in mid-2014.

The Houston-based company, which has about $8.3-billion in debt, said it had reached an agreement with creditors to reorganise the company and obtained $2.2-billion in fresh financing to continue operating through the Chapter 11 bankruptcy process.

The Company anticipates that the cash available to it during its Chapter 11 Cases is likely to provide sufficient liquidity to support the business during the financial restructuring process. As such, the company does not currently intend to seek debtor-in-possession (DIP) financing.

Linn has filed various customary motions with the Bankruptcy Court in support of its financial restructuring. The company intends to continue to pay employee wages and provide healthcare and other defined benefits and to pay suppliers and vendors in full.

Mark Ellis, chairman, president and CEO of Linn, said, "We believe the Restructuring Support Agreement reflects the confidence of our first lien lenders in the quality of our assets and represents an important step forward for the company. After our review of the available options, with the assistance of our financial and legal advisors, we determined that this court supervised financial restructuring process is the best course of action for the company and our stakeholders.

"Like many others in our industry, Linn has been impacted by continued low commodity prices. We believe that these steps will provide us the financial flexibility to successfully manage in the current commodity price environment and, when combined with constructive agreements with our remaining creditors and potential third party financing, will provide a platform for future growth,'' he added.

Several energy companies are looking at ways to restructure their debt due to low oil and gas prices.

Linn is one of the 15 top US independent oil and natural gas development company with a portfolio of long-life oil and natural gas assets.

Linn, which has assets worth around $11.6 billion, had gone on an acquisition spree in after 2012.

In 2012, the company acquired Pinedale Field operations in Wyoming from British oil giant BP Plc for $1.03 billion, and oil and gas properties in the Hugoton Basin area of southwestern Kansas, for $1.2 billion.

A year later, it acquired Berry Petroleum Co in a $4.3-billion all-stock deal including debt, and purchased oil and natural gas assets in the Permian Basin in West Texas and southeast New Mexico, for $525 million.