Petroflow's North American Petroleum Unit Files for Bankruptcy in Delaware

North American Petroleum Corp. USA, a unit of Petroflow Energy Ltd., filed for Chapter 11 bankruptcy protection to restructure.

The company, based in Denver, yesterday listed both assets and debt in the of $100 million to $500 million in Chapter 11 documents in U.S. Bankruptcy Court in Wilmington, Delaware.

North American’s main operations involve drilling natural gas wells in Oklahoma, according to court papers. Its Prize Petroleum unit also filed a Chapter 11 petition.

Because of a business dispute with Enterra Energy Corp., the company “determined that the most prudent alternative would be to seek to restructure their operations, potentially through a sale or other transaction,” it said in a filing.

The company said it entered into a forbearance agreement with pre-bankruptcy secured lenders on May 11 which was terminated on May 24 by the lenders.

“Recognizing the challenges facing them, the debtors filed these Chapter 11 cases to provide them the opportunity to implement their sale process in an orderly and value-maximizing manner,” the company said in court papers.

Petroflow said in a statement March 31 it wouldn’t meet a deadline for filing audited financials for 2008 and 2009 in Canada.

The bankruptcy case is In re North American Petroleum Corp. USA, 10-11707, U.S. Bankruptcy Court, District of Delaware (Wilmington).

To contact the reporters on this story: Dawn McCarty in Wilmington, Delaware, at dmccarty@bloomberg.net; Bob Van Voris in New York at rvanvoris@bloomberg.net.

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