Onshore production company Warren Resources, Inc. (NASDAQ:WRES) has recently filed for Chapter 11 bankruptcy protection in the US Bankruptcy Court for the Southern District of Texas.

According to court filings, Warren Resources currently has almost $230 million and $545 million in assets and debts respectively.

Restructuring Plans

Warren Resources is presently working on its restructuring prospects. As part of the effort, the company’s debts worth $247.70 million to its first lien lender, Blackstone Group subsidiary GSO Capital Partners LP, will be settled by swapping 82.50% stake of the restructured Warren Resources. Furthermore, GSO Capital Partners has agreed to provide $130 million bankruptcy exit loan and another $20 million for the Chapter 11 filing.

On the other hand, Warren Resources owes a total of $236.70 million to its second lien lenders and unsecured senior note holders. Consequently, Claren Road Asset Management LLC, Citrus Energy, Carlyle Group’s hedge fund, and bondholders will share the remaining 17.50% stake.

Atty. Kurt Mayr, Claren Road representative, the voluntary bankruptcy filing will allow GSO, as a major shareholder, to take over Warren Resources before the global oil market normalizes

Accordingly, the entire proceedings will be fulfilled by September. The restructuring proposal, on the other hand, is still subject for legislative approval.

Energy Industry Turmoil

Energy companies have been experiencing financial woes lately due to the massive drop in oil prices over the past months. Almost 80 independent oil and gas exploration companies in the US have already filed for bankruptcy as of May 16. The number of filings are expected to grow up to 150 before the turmoil is finally over.

Warren Resources, for one, has been on the edge of this dilemma for months now. Last April, the company revealed the development of a restructuring agreement following an announcement prior that it will not be able to make the interest payment for its senior notes worth $7.50 million.

In 2015, the company’s gas sales declined 42% year-over-year to $83.70 million.