Denver-based Extraction Oil & Gas Inc. announced Sunday it has filed for Chapter 11 bankruptcy protection in the District of Delaware, citing the impacts of Covid-19 and low commodity prices on its business.

Extraction, which operates exclusively in the Denver-Julesburg (DJ) Basin, said in May that it had engaged strategic advisers because of concerns about meeting debt commitments, and that it had suspended drilling and completions activity in the DJ.

The company has secured $125 million in debtor-in-possession financing, which, subject to court approval, is expected to provide sufficient liquidity to continue business operations and minimize disruption during the Chapter 11 cases.

Additionally, Extraction said it has entered into a restructuring support agreement with certain of its unsecured noteholders in order to facilitate a swift exit from Chapter 11.

Extraction reported total production of 94,247 boe/d in the first quarter, including 38,502 b/d of oil.

Lower 48 independents, which faced liquidity challenges even before the pandemic, have been battered especially hard by the current economic crisis, as evidenced by the distress facing big-name operators such as Chesapeake Energy Corp. and Whiting Petroleum Corp.

In early June Haynes and Boone LLC said 19 North American exploration and production operators had filed for bankruptcy protection since the start of the year, and it is “reasonable to expect” more companies will seek protection from creditors in the months to come. Lower 48 proppant sand provider Vista Proppants & Logistics LLC filed for bankruptcy protection last week.

The rig count in U.S. unconventional formations stood at 245 as of Friday, down 69% year/year, although it was only down by five rigs from the previous week, suggesting that the downward slope in drilling activity may be leveling off.

July West Texas Intermediate crude oil futures were trading at $36.72/bbl around midday Monday, up 45 cents from Friday’s settle.

Evercore ISI analysts said last week they expect global capital spending from the upstream segment in 2020 “to establish new lows that are 16% below the 2016 trough and 55% below the 2017 peak.”