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Delaware Bankruptcy Court Approves Venoco Restructuring Plan

A federal court has approved Venoco Inc.’s restructuring proposal, in which the company filed for bankruptcy to reduce debt and deal with low gas prices and the closure of Santa Barbara County oil and gas transportation pipelines, which federal regulators shut down after the Refugio Oil Spill.

The U.S. Bankruptcy Court for the District of Delaware approved Venoco’s plan this week, company spokesman Ned Wigglesworth said in a statement. The company should leave the restructuring process later this month, he added.

Venoco filed for bankruptcy in March, shortly before suing Plains All-American Pipeline for more than $12 million in lost profits after the May 19, 2015, oil spill and pipeline shutdown.

The company has the majority of its personnel in Carpinteria, and operates Platform Holly offshore of Goleta, which provided half the company’s oil and gas production before the pipeline shutdown.

The restructuring plan aimed to eliminate $1 billion in debt in an agreement with senior lenders, including Apollo Investment Corporation, regarding an exchange of debt for ownership shares. 

With the court’s approval, the company plans to keep the same leadership team and assets, Wigglesworth said.

“The low price of oil and the ongoing closure of Plains All American Pipeline 901 continue to be serious problems,” Venoco CEO Mark DePuy said in a statement.

“With this restructuring, Venoco is in a much stronger position to withstand these challenges and others that may follow.”

Both of the Plains pipelines in Santa Barbara County are still shutdown, and federal regulators have ordered Plains to install safety valves and complete other requirements before the system can be restarted.

The investigation into the spill found that external corrosion caused the pipeline rupture, and Plains faces 42 felony counts related to making a false oil-spill report, failing to notify authorities within an hour, and polluting state waters.

Noozhawk managing editor Giana Magnoli can be reached at .(JavaScript must be enabled to view this email address). Follow Noozhawk on Twitter: @noozhawk, @NoozhawkNews and @NoozhawkBiz. Connect with Noozhawk on Facebook.

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