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California’s biggest oil producer will delay submitting its quarterly report to regulators until next month and ditched its guidance for the rest of this year because of the effects of the Covid-19 pandemic, the company said Monday in a filing. Tumbling demand for its crude forced the company to shut in the equivalent of 5,000 barrels a day of oil production.
“In the event the company is not successful in restructuring its balance sheet, there is substantial doubt about the company’s ability to continue as a going concern,” the Los Angeles-based explorer said.
California Resources has struggled to manage its debt since its spinoff from Occidental Petroleum Corp (NYSE:OXY). in late 2014, during the early stages of a crash in crude prices. As recently as late March, the company was said to be seriously considering bankruptcy, according to people with knowledge of the matter.
The shares have lost nearly three quarters of their value this year alone. Colony Capital (NYSE:CLNY) Inc., the hedge fund founded by Tom Barrack Jr., announced a $320 million deal last year to back California Resources.
©2020 Bloomberg L.P.
