Energy: Restructuring and transactions in a distressed environment

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Restructuring and transactions in a distressed environmentOil prices have recovered and are hovering around $50 a barrel, but that’s just half what they were two years ago and still too low to keep some energy companies afloat. As pricing continues to be depressed and hedges expire, some companies are using credit lines to fund losses. Negative cash flows and evaporating liquidity have resulted in many producers, service firms and suppliers restructuring. Many more will face tough questions and have difficult decisions to make in the months ahead.

No spin can turn that into good news. At the same time, “it doesn’t mean that these companies are finished,” says Bryan Benoit, national partner in charge of energy, advisory, forensic and valuation services. “Distressed firms have the opportunity to restructure and emerge for the next successful phase of their business life.”

This article looks at several aspects of energy restructuring, including:
  • Out-of-court settlements vs. Chapter 11
  • Fresh start accounting
  • Section 363 sales
  • Valuation issues

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CONTACT Bryan Benoit
National Managing Partner
Energy Advisory Services
U.S. Corporate Finance practice leader
T +1 832 476 3620