* Lower oil prices and debt named as reason for filing
* $40 mln DIP financing secured, subject to court approval
(Adds trading activity, details of bankruptcy filing)
NEW YORK, March 9 Pacific Energy Resources Ltd
PFE.TO filed for Chapter 11 bankruptcy protection on Monday,
saying the decline in crude oil prices made it difficult to pay
The company, which has oil and gas assets in Alaska and
near California, said its revenue depended on the market price
for the crude oil produced at its properties, as well as the
level of production.
"Due to a variety of factors, including the drastic fall in
the price of crude oil in the last calendar quarter of 2008,
the stress on the debtor's cash flow worsened," the company
said in documents filed with the U.S. Bankruptcy court in
In a release, the company also said debt from past
acquisitions and poor capital market conditions had cut into
liquidity and cash flow, making it impossible to operate its
business and invest in assets to increase oil production.
Oil and gas producers have been squeezed as U.S. federal
regulations force them to write down the value of assets in the
wake of the 70 percent drop in oil and gas prices since July.
Many experts have said they expect the sharp decline in
asset prices to set off a wave of deal-making in the energy
sector as larger, cash-rich companies seek to pick up
properties at a fraction of their values of even a few months
Pacific Energy has asked the court to approve a
debtor-in-possession loan of as much as $40 million. J. Aron &
Co is among the potential lenders, according to court
The Long Beach, California-based company said a Chevron
Corp (CVX.N) affiliate had a majority working interest and was
the operator of some Pacific Energy properties in Alaska.
Pacific Energy said seven affiliated entities had also
filed for Chapter 11 bankruptcy protection, including Gotland
Oil Inc, Petrocal Acquisition Corp and San Pedro Bay Pipeline
Pacific Energy has about 100 employees, according to court
A company representative was not immediately available to
comment on the outlook for jobs or any operational changes.
The case is In re Pacific Energy Resources Ltd, US
Bankruptcy Court, District of Delaware, No. 09-10785.
(Reporting by Chelsea Emery; Editing by Derek Caney and Lisa