(Reuters) - Oil and gas producer Warren Resources Inc WRES.O said it would defer a $7.5 million semi-annual interest payment due on Monday in an attempt to reach a deal with its creditors that will help it improve its capital structure.
The company, which has hired Jefferies LLC to help with a potential restructuring, said it had sufficient liquidity to make the interest payment in full.
Several oil producers, whose cash flows have been squeezed by a 70 percent fall in oil prices since June 2014, have begun discussions with creditors to defer payments and improve liquidity to help weather the prolonged slump.
Warren Resources has 30 days to pay interest on the senior notes due 2022. If the company does not make the payment by then it would qualify as default.
Warren Resources has $167.3 million outstanding on the notes.
“We look forward to using the interest payment grace period to begin discussions aimed at achieving an improved capital structure that, in light of challenging commodity prices, would be viable in the long term,” Chief Executive James Watt said in a statement.
Up to Friday’s close, Warren Resources’ stock had fallen nearly 85 percent in 12 months.
Reporting by Anet Josline Pinto in Bengaluru; Editing by Maju Samuel