Stone Energy Corp filed for Chapter 11 bankruptcy on Wednesday to eliminate about $1.2 billion in debt by transferring control of the offshore oil producer to its noteholders in the face of a two-year slump in energy prices.

The Lafayette, Louisiana-based company joins scores of oil-and-gas exploration and production companies that have filed for bankruptcy since oil prices began falling from more than $100 a barrel in 2014.

In a filing with the U.S. Bankruptcy Court in Houston, Stone said it has adequate liquidity to keep up its operations without the need for debtor-in-possession financing during the bankruptcy proceedings, which it hopes to complete in 90 days.

Though Stone has said it has broad creditor backing for its plan, the company’s largest shareholder, Thomas Satterfield, has said he plans to challenge the proposed restructuring in court.

Satterfield told Reuters on Wednesday he remained opposed to the plan, which proposed giving 4 percent of the stock in the reorganized company to shareholders, with warrants for up to an additional 10 percent.

Stone has cut spending and focused on high-margin developments in the Gulf of Mexico to try to ride out the price slump. The company reported a net loss of $1 billion in 2015 and $474 million for the first nine months of 2016.

On Dec. 5, the company said it may not be able to resume production at its Amethyst well, which has reserves of approximately 79 billion cubic feet of gas equivalent. Stone Energy shut in the well in April for a technical evaluation.

Source: www.reuters.com