WA-BASED Red Fork Energy has become the first Australian victim of the US-Saudi shale war, moving into receivership after it was unable to meet payment on its $100 million debts.
The Brent crude oil price had slid more than 40 per cent from around $112 per barrel in June to about $64 on 10 December, when Red Fork announced it had entered receivership after it was unable to meet payments to financier Guggenheim Corporate Funding.
KordaMentha’s Cliff Rocke has been appointed receiver and Ferrier Hodgson’s Martin Jones administrator.
The company has been developing two shale oil and gas ventures in Oklahoma, the Big River and East Oklahoma projects, which produced 1795 barrels per day in the September quarter for sales of US$9.78 million.
Red Fork’s share price plunged as low as $0.006 before it was placed in a trading halt on 9 December pending the receivership announcement, from a price of $0.37 in January.
It had drawn down on US$100 million of the US$150 million secured term loan it acquired from Guggenheim on 30 September.
The company was in the process of undertaking a strategic review and announced in October it was close to securing a refinancing deal to repay Guggenheim and replace it with a new lender.
Red Fork’s presence in Australia is limited to bank accounts and its ASX listing, while the US operations are understood to be continuing as usual.
The administrators have an obligation to call an initial meeting of creditors within 10 days of the receivership, before a preliminary report is presented in a second meeting to guide the next step in the process.