ATP Oil & Gas Corp. (ATPG) filed for Chapter 11 bankruptcy protection Friday, hit by the rising costs associated with its deep-water drilling projects in the Gulf of Mexico.
The company listed assets of $3.64 billion and liabilities of $3.49 billion in papers filed with the U.S. Bankruptcy Court in Houston.
ATP, which has 75.9 million barrels of crude oil in reserve, plans to tap a $700 million bankruptcy loan to fund the restructuring, according to court papers. The company aims to borrow $80 million on the loan from lenders led by Credit Suisse AG (CS) on an interim basis. ATP already owes Credit Suisse $366 million.
ATP blamed its financial woes in part on the drilling ban put in place in the Gulf of Mexico, where 90% of its wells are located, after the disastrous 2010 Deepwater Horizon oil spill. It resumed drilling in the Gulf last spring.
“While the moratorium adversely affected all companies involved in deepwater drilling in the Gulf of Mexico, the impact was especially profound on ATP, which is a smaller company than its principal competitors with a heavier concentration in the deepwater Gulf of Mexico,” ATP said in court papers.
The Houston-based company was founded in 1991 by T. Paul Bulmahn, its former chief executive and current chairman. It drills for oil and gas in the Gulf of Mexico, Mediterranean Sea and North Sea. Its deep-water drilling operations are costly and often plagued with complications.
Earlier this year, the company faced operational problems at its platform in the Gulf of Mexico and a deep-water well in the Mediterranean. In early June, its newly hired CEO,Matt McCarroll, left after just a week and rescinded his purchase of 1 million of ATP’s shares.