White Star Petroleum LLC, founded by the late Aubrey McClendon, has filed for Chapter 11 bankruptcy protection and is exploring strategic alternatives including a possible sale of the company.
White Star filed in the U.S. Bankruptcy Court for the District of Delaware earlier this week, just days after five unpaid vendors filed an involuntary bankruptcy case against it in the U.S. Bankruptcy Court for the Western District of Oklahoma. The Midcontinent pure-play said it is reviewing that petition to determine which venue is appropriate.
In the meantime, the Oklahoma City-based company has secured $28.5 million of debtor-in-possession (DIP) financing to help fund operations during the proceedings. The voluntary filing has the support of primary secured creditors, according to the company.
“White Star is continuing to operate its business during the strategic process, and with the DIP financing, has sufficient liquidity to timely pay all employees, vendors and suppliers for services and products provided during Chapter 11,” CEO Elliot Chambers said.
Lackluster production and high overhead has limited the company’s ability to operate. It stopped drilling new wells earlier this year, according to court filings. It has about $342 million of loan and bond debts.
White Star had its beginning in 2013 after McClendon was ousted from Chesapeake Energy Corp. He founded American Energy Partners LP (AELP) to develop affiliates with basin-specific strategies across the country. Formerly American Energy-Woodford LLC, White Star was rebranded and became a stand-alone company in 2016 after AELP ceased operations following McClendon’s death in a car accident.
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