Oil prices continue to suffer, following the historic negative collapse a week ago. This crisis prompted Diamond Offshore Drilling Inc., a rig contractor stake held by Loews Corp., to file for Chapter 11 bankruptcy.
The petition, which was filed in Bankruptcy Court for the Southern District of Texas, lists $5.8 billion of assets and $2.6 billion of debt citing year-end 2019 data. Diamond Offshore also claims to possess $434.9 million in cash, Bloomberg reported on April 27th.
The Diamond Offshore company operated by providing contract drilling services to the energy industry. It was known for its unique floater drilling rigs which were notorious for the ability to reach sea depths of 10 thousand ft and more.
However, the production of offshore oil became too expensive to survive the current crisis. Five biggest Western companies — Exxon Mobil Corp, Royal Dutch Shell BP PLC, Total and Chevron Corp — have cut spending on an average of 23% following the COVID-19 era’s drop in oil demand, reports Reuters.
The Diamond Offshore representatives also listed the price conflict between OPEC and Russia as one of the factors that had worsened their business “precipitously”.
In 2019 the driller had 15 offshore rigs globally, with a major presence in the Gulf of Mexico, and about 2,500 employees.
