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Black Elk Energy files Chapter 11 case following involuntary petition
By Caroline Salls
Pittsburgh, Sept. 15 – Black Elk Energy Offshore Operations, LLC filed Chapter 11 bankruptcy Tuesday in the U.S. Bankruptcy Court for the Southern District of Texas after having an involuntary Chapter 7 bankruptcy case filed against it last month.
The company said in court documents that The Grand Ltd., Gulf Offshore Logistics, LLC, Ryan Marine Services, Inc. and Laredo Construction, Inc. filed an involuntary Chapter 7 case against it on Aug. 11.
Black Elk subsequently consented to the petitioners’ order for relief and filed a motion to convert its involuntary Chapter 7 case to a voluntary Chapter 11 case.
As of Sept. 30, 2014, the company said its ability to service debt was in question. This “bleak outlook” was made worse by rapidly falling crude oil prices and constant turnover of key management personnel.
As oil prices remained depressed through 2015, Black Elk said it lacked the ability to raise additional capital and struggled to pay creditor claims, leading to the involuntary filing.
Since the involuntary petition was filed, Black Elk said the Bureau of Safety and Environmental Enforcement issued a shut-in incident of non-compliance for failing to implement and maintain a required safety and environmental compliance system program.
The shut-in requires the company to continue its well plugging and abandoning activities.
In connection with the Chapter 11 filing, the company requested court approval to use the cash collateral of its 13¾% senior secured noteholders to fund its operations while in bankruptcy.
According to the voluntary Chapter 11 petition, Black Elk had $339.7 million in assets and $432.3 million in debt as of Sept. 30, 2014. The petition listed $50 million to $100 million in assets and $100 million to $500 million in debt as of the filing date.
The company is represented by Baker & Hostetler LLP.
Black Elk Energy is a Houston-based oil and gas company. The Chapter 11 case number is 15-34287.
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