Aside from the general contractor, at least one subcontractor has also placed a lien on the property that has been amended twice since April 2020. The latest lien placed on the facility, known as the Husky Energy Lima Refinery Company, was on June 23, 2020. Both mechanics lien claims were recorded with the Allen County clerk’s office, according to the lien affidavits.
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Property owner Husky Energy holds its headquarters in Calgary, Alberta. The company also has two additional American facilities aside from Lima, with plants in Toledo, OH, and Superior, WI.
As of July 2020, recent reports have found that the oil and gas industry is experiencing a wave of bankruptcy filings.
Two Contractors Owed a Combined $3.9M at Husky Oil Refinery Project
The two contractors are allegedly owed a total of $3,906,606.60 between two separate lien filings for work taking place at the Husky Energy Lima Refinery Company, which is located at 1233 S Metcalf St, Lima, OH.
According to the lien affidavits, the largest lien was filed by the project’s general contractor in Apache Industrial United, Inc. against Husky Energy pursuant to Ohio statutes governing mechanics liens.
On June 3, 2020, Apache Industrial United filed their lien valued at $2,108,070.99, which accounts for nearly 54% of the total funds withheld from the two contractors on this job.
To date, subcontractor Toledo Mechanical Insulation, Inc. is also owed an additional $1.7M pursuant to a contract with RMF Nooter, Inc. for contributions to the Husky oil refinery plant project in Lima.
According to the lien affidavits, Toledo Mechanical Insulation’s liens have been partially released since their original filing on April 28, 2020. Back in April, the subcontractor claimed they were owed a total of $2,624,572.21.
On May 22, 2020, Toledo Mechanical Insulation was paid a total of $380,392.37 towards the value of their original lien filing which left a remaining balance of $2.2M.
Currently, Toledo Mechanical Insulation is still owed a total of $1,798,535.61 from RMF Nooter.
A Recent Uptick in Oil and Gas Bankruptcies
Amid the coronavirus pandemic and geopolitical tensions in the Middle East, the oil and gas industry is taking a hit in 2020. Oil and gas companies such as Denbury Resources, Rosehill Resources, and Chesapeake Energy Corporation are all facing potential bankruptcy amid the COVID-19 outbreak.
The second quarter of 2020 has led to 18 bankruptcy filings for oil and gas producers in America, according to a report conducted by Visual Capitalist. A recent report from law firm Haynes and Boone LLP in July found that those 18 bankruptcy filings equate to $29B in debt for Q2 alone.
Haynes and Boone’s investigation determined that through total debt by bankruptcy, energy producers, such as Husky Energy, have experienced the most debt at $30.7B since January 2020. The report has also found that oilfield services have faced $24B in total debt by bankruptcy since January.
In Q2 of 2020, a combined $42.7B in debt accrued between oil and gas producers, oilfield services, and midstream services. These financial hardships are hitting some of the largest energy companies in the U.S., including Chesapeake Energy Corporation, Denbury Resources, and Rosehill Resources.
According to multiple reports, all three energy giants are facing bankruptcy troubles of late.
Chesapeake Energy Corporation
In a report published by The Guardian on June 28, 2020, Chesapeake Energy Corporation reportedly faced $9B in debts, resulting in a bankruptcy filing.
Back in 2008, Chesapeake Energy Corporation held a market cap of $37B. Today, the company is worth roughly $115M.
As of July 29, 2020, Denbury Resources plans to seek bankruptcy, according to reports. The Texas-based driller also reportedly planned on filing a Chapter 11 petition in the U.S. Bankruptcy Court in the Southern District of Texas before the end of July. Entering their potential bankruptcy filing, Denbury Resources faced $2.1B in bond debt.
As of the first week of August 2020, the Houston Business Journal also reported that Denbury Resources has begun to lay off staff members prior to their bankruptcy filing.
The Houston oil and gas exploration company released a statement on July 27, 2020, confirming that they filed for Chapter 11 bankruptcy.
Following the statement, the Houston Chronicle reported that Rosehill Resources will no longer be a publicly-traded company. According to the report, Rosehill Resources will become a private company owned by several creditors.