Cox Oil’s DIP agent withdraws consent to access cash collateral

By Sarah Lizee

Olympia, Wash., Jan. 18 – Cox Oil Offshore, LLC’s debtor-in-possession facility agent, Amarillo National Bank, has withdrawn its consent for the company to use cash collateral, according to documents filed Wednesday with the U.S. Bankruptcy Court for the Southern District of Texas.

The agent is also seeking emergency relief from the automatic stay to enforce its rights under the DIP financing.

“The debtors have been in default under the DIP documents for months,” Amarillo said in the motion.

The agent noted that the DIP loans matured on Nov. 30, and the outstanding DIP obligations remain unpaid.

“The proceeds of the debtors’ asset sales will be significantly less than the outstanding DIP obligations, and the debtors’ continued use of cash collateral will further diminish the amount of the outstanding DIP obligations that will be repaid,” Amarillo said.

The agent said the lenders don’t consent to the debtor’s use of proceeds from the recent sale of assets to W&T Offshore, Inc. for $72 million, which constitute their cash collateral.

Amarillo said it is seeking relief from the automatic stay so that it can apply the cash collateral to satisfy a portion of the outstanding DIP debt.

The Dallas-based drilling company filed bankruptcy on May 14, 2023 under Chapter 11 case number 23-90324.

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