Oil driller Dolphin declares bankruptcy with $1 billion debt

OSLO (Reuters) - Norwegian oil and gas rig operator Dolphin Drilling ASA said it would file for bankruptcy on Wednesday after failing to reach a deal with creditors, falling victim to a prolonged downturn in the oil services sector.

Formerly known as Fred. Olsen Energy, Dolphin had debt of just over $1 billion at the end of 2018 and a net loss for the year of almost $300 million, according to its annual report.

Once a dominant supplier of drilling rigs to oil and gas firms exploring the North Sea, Dolphin was hit hard by the a collapse in oil prices from 2014 to 2016 as well as competition from newcomers that drove down rig rates.

Failure to forge a consensus among creditors will likely lead banks and other secured lenders to decide the company’s fate, including potential asset sales.

Major lenders include Danske Bank, DNB, SEB and Swedbank, as well as funds advised by Strategic Value Partners LLC and its affiliates.

“Regretfully, the creditors of Dolphin Drilling ASA have not been able to agree on the terms for a consensual restructuring, and the secured creditors have demanded payment of all amounts outstanding under the secured debt of the company,” Dolphin said in a statement.

“As per the resolution of the board, the Company will file for bankruptcy today,” it added.

In addition to a fleet of four drilling rigs and two drillships, Dolphin is also the majority owner of Belfast’s Harland & Wolff shipyard, builder in the early 20th century of the RMS Titanic ocean liner.