On Friday, Gulf of Mexico producer ATP Oil & Gas Corp filed for Chapter 11 bankruptcy protection. ATP blamed its bankruptcy upon the financial fallout of the deepwater drilling moratorium following the Deepwater Horizon disaster in 2010. The company reported total debts of $ 3.49 billion and assets of $ 3.64 billion. ATP said its operations would continue while restructuring goes on, and its continuing operations would be funded by $618 million of debtor-in-possession funding.
While filing for protection in Texas Court, the company said that its cash flows and development plans had been “dramatically impacted” by the stoppage of deepwater drilling which continued for many months after the BP Plc well blew off the coast of Louisiana in April 2010.
ATP said, “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 of operations in the deepwater Gulf of Mexico.”
The company also said that it had spent well over $ 1 billion on infrastructure construction for bringing six wells online in 2010 and 2011. However, the stoppage of deepwater drilling by the federal government led to financial catastrophe. According to the company, most of the infrastructure had been funded by debt, and the bankruptcy filing was made necessary to undertake “a comprehensive financial restructuring.”