Shares of California Resources Corp. plunged earlier this month after the Wall Street Journal reported the Santa Clarita oil and gas company was asking lenders for a loan of $500 million to $600 million to carry it through a possible Chapter 11 filing. CRC is hoping to refinance about $5 billion in debt, which will start maturing next year. A payment of $74 million in interest is due in June and a proposed bond exchange fell through in March because of the stock market crash. It has been a rough year for CRC. The price of crude oil has tanked due to the coronavirus pandemic and CRC’s stock has been dragged down with it. By April 21, the price of oil had actually turned negative – minus $37.63 a barrel – for the first time in history amid fears that producers would run out of storage capacity. Oil started the year at $61.18 a barrel. After an apocalyptic April, the commodity bounced back to close May 20 at $33.52 a barrel. In a May 6 filing with the Securities and Exchange Commission, CRC said disruption from COVID-19 had forced it to delay its first-quarter earnings report until June, and the company is continuing to pursue the restructuring of its balance sheet. “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 filing stated.
