OREANDA-NEWS. Goodrich Petroleum has filed for Chapter 11 bankruptcy protection, becoming the latest US oil and gas producer to seek restructuring amid a weak oil prices.

Under the restructuring plan, the company aims to eliminate about $400mn in debt and improve its balance sheet to "strategically position the company for long-term performance in an anticipated improving commodity price environment," it said.

The restructuring will eliminate all of the company's debt other than its first lien reserve based loan facility, which currently total $40mn. The agreement also allows the currrent management team to remain with the company through the court-supervised restructuring process.

The Chapter 11 filing comes after the independent failed to restructure its balance sheet as earlier attempts didn't get the approval of both the preferred and common stockholders and unsecured debtholders.

The independent expects to have sufficient funds to pay for operations, the vendors and employee salaries.

The company, with operations spread across Louisiana, Texas and Mississippi, generated a negative cash flow of $17mn in 2015, primarily on account of an impairment charge of $450mn, compared with an operating cash flow of $122mn a year earlier. It cut its capital expenditure to $118mn in 2015 from $322mn a year earlier and sold assets worth $114mn last year compared with $54mn a year earlier.

Goodrich's current total debt is about $440mn versus total assets of about $98.9mn. Average production in 2015 fell to 7,306 b/d of oil equivalent (boe/d) from 11,475 boe/d, largely on account of the sale of its Eagle Ford assets in September, which it acquired in 2010 to shift its focus away from gas to oil.

Earlier this week, offshore oil and gas producer Energy XXI filed for Chapter 11 protection to eliminate more than $2.8bn in debt, joining a growing list of smaller to medium-sized independents who are undergoing similar restructuring. Others such as SandRidge Energy and Midstates Petroleum have warned that they may have to file for bankruptcy as high debt constrains their ability to conduct business as usual as oil prices hover around $30-$40/bl.