Page 16 - NorthAmOil Week 46

NorthAmOil PERFORMANCE NorthAmOil

Gulfport files for bankruptcy protection

US SHALE gas producer Gulfport Energy has filed into new hedging arrangements in accordance
for Chapter 11 bankruptcy protection, join- with an agreement with certain lenders.
ing the growing list of bankruptcies that have The company said the court had authorised it
resulted from this year’s industry downturn. to borrow up to $90mn in debtor-in-possession
The company had already been struggling with (DIP) financing. This is expected to help support
reduced revenue from low natural gas prices, ongoing operations, which the company is plan-
high interest payments on its unsecured debt ning to continue as normal during the restruc-
and burdensome midstream contracts for turing process.
months prior to the coronavirus (COVID-19) Gulfport said it intends to use the bankruptcy
pandemic, so the bankruptcy filing comes as no proceedings to strengthen its balance sheet,
surprise. restructure certain debt obligations, “signifi-
Gulfport said in a November 14 statement cantly” reduce its midstream cost structure and
that it had entered into a restructuring support develop a “more sustainable” capital structure.
agreement under which it anticipated eliminat- Separately, media reported that the company
ing roughly $1.25bn in funded debt, as well as wants the court to reject its firm gas transporta-
“significantly” reducing future annual cash inter- tion agreements with Rockies Express Pipeline,
est expense. As of September 30, Gulfport had Rover Pipeline and several units of TC Energy.
total debt of about $2.5bn, according to its filing Such a move would result in significant cost
with the US Bankruptcy Court for the Southern reductions for debtors. Gulfport told the court
District of Texas. that rejecting the Rockies Express and Rover
In a November 17 update, Gulfport said the agreements would save the debtors $18mn per
court had granted approval of all of the compa- year in net costs, or around $222mn over the
ny’s “first day” motions. Among other things, remaining term of the deals. It also said commit-
these authorise Gulfport to continue paying roy- ments with TC Energy have put the debtors on
alties, employee wages and benefits and certain the hook for $700mn in aggregate gross costs for
vendors and suppliers. They also allow it to enter the remaining terms of those agreements.™

PROJECTS & COMPANIES

Tellurian reportedly in supply

talks with Asian buyers

US-ASIA US-BASED Tellurian is reportedly in talks with customers interested in buying 12mn tonnes
unidentified Asian buyers to sell almost half of its per year of output from Driftwood. The facil-
output from its proposed Driftwood LNG termi- ity would produce 27.6mn tpy in total if it goes
nal on the Gulf Coast. ahead.
This comes after the planned Driftwood According to Souki, the deals would be final-
facility was dealt a blow this year when previous ised during the first half of 2021, with construc-
talks with India’s Petronet LNG failed to result tion on the terminal beginning in the middle of
in a supply and investment deal amid the global the year. He also said Tellurian would no longer
downturn in LNG demand and prices. A mem- employ MoUs as a precursor to more in-depth
orandum of understanding (MoU) between the talks, after the failure of the company’s MoU with
two companies expired in July, and while it was Petronet to lead to a firm deal.
subsequently renewed, comments from Petr- For now, France’s Total remains Driftwood’s
onet’s director of finance, Vinod Kumar Mishra, only customer.
indicate that the Indian firm is not likely to move Separately, it has emerged that Tellurian com-
forward with a deal at this time. pleted its first ever LNG cargo trade in the third
“I want to clarify again that this is a quarter of this year. A report the company filed
non-binding agreement, and there is no with the US Securities and Exchange Commis-
obligation on either of the parties to do any- sion (SEC) showed that Tellurian’s marketing
thing. This is just an agreement to explore the arm bought the cargo in July and subsequently
possibilities of any deal, which so far has not sold it to an unrelated third party, earning around
emerged,” he said. $7mn in the transaction. Further details were not
In the meantime, Tellurian is also turning provided, apart from the fact that the trade was
its attention to other would-be buyers. Last made under a master agreement reached in April
week, Tellurian’s chairman, Charif Souki, told 2019 in an effort to earn revenue and prepare for
Bloomberg that his company had other potential more future trading activity.™

P16 www. NEWSBASE .com Week 46 19•November•2020