U.S. oil and gas producer Energy XXI , which has operations in Louisiana, Texas and the Gulf of Mexico, said on Thursday it has filed for bankruptcy protection, becoming one of the biggest casualties of the oil rout to date.
The company will eliminate more than $2.8 billion in debt from its balance sheet through the Chapter 11 restructuring, it said in a statement.
Energy XXI's bankruptcy filing underscores the stress oil and gas companies face as oil prices hover around $40 a barrel, down from above $100 almost two years ago. The company's break even is at $60 and above.
Energy XXI said last month it was delaying paying the interest due on the debt of one of its subsidiaries, kicking off a 30-day grace period. The company owed about $2.8 billion as of mid-February.
The company follows more than 40 other energy companies who have sought court protection from their creditors last year. Up to a third of all producers may end up in bankruptcy this year if commodity prices remain depressed, according to consulting firm Deloitte.
Energy XXI said it has sufficient liquidity, including about $180 million of cash on hand as of March 31, and funds generated from ongoing operations, to continue its operations and support the business during the financial restructuring process.
The company's shares closed at 65 cents on Wednesday.
The case is in the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division, case number 16-31928.