Delta Petroleum Corp., an oil and natural-gas explorer and developer whose largest shareholder is Kirk Kerkorian, sought bankruptcy protection after failing to find a buyer. Its shares plunged as much as 45 percent.
The Denver-based company listed $375.5 million in assets and $310.7 million in debt in Chapter 11 papers filed yesterday in U.S. Bankruptcy Court in Wilmington, Delaware.
Delta executives and advisers “unanimously determined that the Chapter 11 process would provide the opportunity for the best result for our creditors, shareholders, suppliers, employees and customers,” Chief Executive Officer Carl E. Lakey said today in a statement.
Delta predominately operates out of the Piceance Basin in the Rocky Mountain region of Colorado. Kerkorian, the billionaire founder of MGM Resorts International, owns a 33 percent stake in Delta, according to data compiled by Bloomberg.
Delta fell 33 percent to 22 cents at 12:51 New York time in Nasdaq Stock Market trading. The stock, which had lost about 96 percent of its value this year before today, dropped as low as 18 cents.
Delta will seek court approval to borrow as much as $57.5 million to help fund operations while in bankruptcy, according to the statement. Delta said it will have enough cash to pay court costs and maintain business operations in the short-term.
The company said Nov. 9 it would probably have to restructure its debt after it wasn’t able to find a buyer willing to pay more than it owed or obtain alternative financing, according to a statement. Delta hired John T. Young of Conway MacKenzie Inc. as chief restructuring officer last month to explore its options.
Delta lost money in seven of the last eight quarters, according to data compiled by Bloomberg. The net loss was $429.4 million for the quarter ended Sept. 30.
Delta owes its 30 largest unsecured creditors about $275.4 million, according to court papers. U.S. Bank NA is the biggest creditor, as the indenture trustee for two groups of noteholders with debt totaling $267.7 million.
The company owes $152.2 million on 7 percent notes due in 2015 and $115.5 million on 3.75 percent notes due in 2037, according to court documents. The 7 percent notes traded at 90.4 cents on the dollar as of yesterday, and the 3.75 percent notes traded at 70 cents on the dollar as of Dec. 14, according to Trace, the bond-price reporting system of the Financial Industry Regulation Authority.
The case is In re Delta Petroleum Corp., 11-14006, U.S. Bankruptcy Court, District of Delaware (Wilmington).