Kirk Kerkorian-backed Delta Petroleum Corp filed for Chapter 11 bankruptcy protection, as unproductive assets hindered the gas-focussed energy company's efforts to find a buyer. The company, 93 percent of whose total production consists of natural gas, has been hurt by a relentless decline in gas prices and ballooning debt. Natural gas prices slipped about 15 percent in the July-September period.
Delta, in which Kerkorian owns a 32 percent stake through Tracinda Corp, has been shopping itself since July. Delta has seen a sharp decline in its unproven assets and its dry hole costs and impairments - expenses incurred in plugging wells that produce no oil or gas - rocketed to touch $420.4 million in the latest quarter.
The company, whose market value has dipped to $9.54 million, had total debt of 282.9 million as of September 30, according to Thomson Reuters data. "The company will seek court approval of a debtor in possession financing facility of $57.5 million arranged by it to address longer term liquidity needs as it works through the bankruptcy process," Delta said in a statement on Friday.
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