Major Oil Transporter, Murphy Energy, Files Chapter 11

Major Oil Transporter, Murphy Energy, Files Chapter 11

Murphy Energy Corp., one of the largest oil and natural gas transporters in the nation, recently announced it had filed for Chapter 11 bankruptcy protection. According to The Wall Street Journal, the company’s financial struggles are due in large part to the collapse of oil prices. Currently, Murphy Energy is looking for potential buyers for all or a portion of its terminals throughout Oklahoma and Texas.

Murphy Energy falls into debt

In its bankruptcy filings, the energy transporter reported that its operating capital was depleted due to the ongoing construction of its recent terminals in the Port Hudson and Port Allen areas of Louisiana. The Journal reported the company listed $75 million in debt liabilities, due in large part to the new facilities and significant decline of fuel prices since 2014. This debt included more than $57 million owed to Bank of America, $7 million to Mabrey Bank and various other creditors.

Murphy Energy also cited in court papers that a failed buyout last year factored heavily into its decision to seek Chapter 11 bankruptcy protection. This purchase offer would have effectively paid off its debt load and paid all of its owners. However, the deal fell through when the buyer unexpectedly backed out. In the aftermath of the sudden back out, the company was not given enough time to negotiate deals with its creditors about restructuring its debt repayment schedule.

The company’s decision to file for bankruptcy came when Bank of America refused to extend the repayment deadlines. As a result, Murphy Energy sought Chapter 11 bankruptcy protection to prevent Bank of America from taking majority ownership of the company.

Prior to the filing, Murphy Energy officials believed they would be able to maintain operations and eventually pay down its debt load.

The significance of the Murphy Energy filing

The company’s bankruptcy filing marks just the latest in a long line of domestic energy companies this year. With prices on the oil market hovering around $40 per barrel now, down from over $100 two years ago, it has become difficult for these companies to maintain cash flow and operating capital.

Are you a creditor in a bankruptcy?  Have you been sued by a bankrupt?  If you have any questions about your rights, please contact me, Joel Glucksman, at 201-806-3364.

For more articles regarding energy companies filing for bankruptcy, check out:

• Atlas Resources Files for Chapter 11 Bankruptcy Protection
• The Biggest Bankruptcy Filing in Brazilian History Filed by Oi SA
• Chaparral Energy Inc. files for Chapter 11 Bankruptcy Protection