Sabine Oil & Gas Corp (OTCMKTS:SOGC) is one fuel company that seems to be running out fuel of its own. The company is under a debt of $1.7 billion, which it is currently struggling to pay. The company is actively seeking waivers and lenders to lighten the burden of its debt. If the company is unable to come to an agreement with the lenders soon, it would be asked to pay its debt immediately. The amount also includes a $700 million bank loan, which would be accelerated to 180 days in this situation.
The company says that it has resorted to selling its assets and restructuring debts in and out of court, amongst other steps to recover. The debt of the company stood at $2.82 billion on March 15, so some progress has been achieved. The company also announced that it has $326.8 million in cash on hand, after fully drawing its revolving credit. The reason issued by the company for being tangled in such a mess was the falling oil and gas prices. The lenders are still considering whether to cut the amount it can borrow, from the firm’s revolving credit.
Subsequently, the company issued a warning to its investors saying that with current cash shortages, it might be difficult for the company to continue. The administration is also considering the option of filing for bankruptcy. The amount borrowed on revolving credit would reduce the borrowing base of the company and would leave it very little to continue mining for oil. However, Sabine Oil & Gas Corp (OTCMKTS:SOGC) is not the only one facing these problems; the list has three other names from the energy sector.
The fluctuations in oil prices have not just affected the companies in the US, but the problem extends towards Canada as well. The result has been huge cut downs in expenditures, which has consequently resulted in a number of people losing their jobs. If the SOGC is unable to secure a few waivers or somehow borrow substantial amount to continue mining, it will need to file for bankruptcy.