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Shale driller Chaparral Energy files for bankruptcy due to pandemic woes

Aug 16 (Reuters) – Oklahoma oil and gas producer Chaparral Energy Inc filed for Chapter 11 bankruptcy protection on Sunday, the latest U.S. energy sector casualty in recent months as the coronavirus pandemic crushes oil prices to unsustainable levels.

The company listed both assets and liabilities in the range of $500 million to $1 billion, according to a court filing in the U.S. Bankruptcy Court in Delaware.

This is the second time that the company has filed for bankruptcy protection. The last time was during the oil price slump in 2014-16 and it emerged out of it in March 2017.

In May, the company warned of its ability to continue as a going concern amid a historic plunge in commodity prices and said it had hired legal and financial advisors.

In recent months, debt-laden major shale independents such as Chesapeake Energy and Whiting Petroleum have succumbed to one of worst crises that the oil industry has ever faced. California Resources Corp also filed for Chapter 11 after defaulting on interest payments.

A fall in economic activity due to the COVID-19 pandemic and a price war between top oil producers Russia and Saudi Arabia hurt oil prices, with crude dropping below $0 in April for the first time in history.

Reuters reported in March that Chaparral was working with debt restructuring advisers as it looked to shore up its cash position.

Oklahoma City-based Chaparral had around $421 million of debt outstanding at the end of 2019. (Reporting by Kanishka Singh in Bengaluru; Editing by Shailesh Kuber)

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