BPZ Resources, Inc., an independent oil and gas company with assets in Peru, has filed a voluntary petition in the United States Bankruptcy Court for the Southern District of Texas seeking relief under the provisions of Chapter 11 of Title 11 of the United States Bankruptcy Code.
None of the company’s direct or indirect subsidiaries has filed for reorganization under Chapter 11.
Investopedia defines Chapter 11: “Named after the U.S. bankruptcy code 11, Chapter 11 is a form of bankruptcy that involves a reorganization of a debtor’s business affairs and assets. It is generally filed by corporations which require time to restructure their debts. Chapter 11 gives the debtor a fresh start, subject to the debtor’s fulfillment of its obligations under its plan of reorganization.”
Plummeting oil prices
BPZ Energy will continue to operate its business as debtors-in-possession under the jurisdiction of the Bankruptcy Court. Its subsidiaries will continue to operate in the ordinary course. The Company is seeking approval from the Bankruptcy Court for a variety of “first day” motions, including authority to maintain bank accounts and other customary relief.
President and Chief Executive Officer, Manolo Zuniga, stated, “Given the industry downturn and our inability to find a suitable financing resolution to our current debt maturity and interest payments, it has become necessary to pursue the Chapter 11 process. Our efforts to negotiate additional financing to fund business activities and pursue identified strategic alternatives were further impeded when oil prices plummeted and production growth faltered, creating additional obstacles to our restructuring efforts. We will provide updates on this process as they become available.”