Diamond Offshore Drilling Inc (DO.N), a Houston-based contract drilling company, applied for bankruptcy protection in Texas on Sunday, after it missed an interest payment and disclosed it still enlisted restructuring advisers.
In Chapter 11 of the filed document, Diamond stipulated that day rates and demand for its work had “worsened precipitously in recent months,” The company blames the “unprecedented” impact of an oil price war and the virus outbreak.
Worldwide spending on oilfield gears and services were predicted to fall by 21% in 2020, its lowest since 2005. On April 20, oil contracts were traded below zero for the first time in history.
Diamond said it had taken “various actions” to shore up its finances, including borrowing $400 Million under a revolving credit facility. However, the company said “the financial and operational conditions of the Diamond Offshore Group Companies have continued to deteriorate in the weeks following such responses.”