At its peak in the summer of 2014, Oasis Petroleum Inc. (NASDAQ: OAS) stock traded at nearly $60 a share. On Tuesday, the stock closed at $0.41, and it has dropped another 25% in premarket trading Wednesday to trade at $0.31.

Oasis joins at least 18 other oil and gas companies that have filed for bankruptcy in just the third quarter of this year. In the first half of the year, 23 companies filed for bankruptcy.

The company filed a prepackaged bankruptcy plan late last night that will cut its debt by $1.8 billion, an amount equal to its senior unsecured notes and senior unsecured convertible notes.

Neither Oasis Midstream Partners L.P. (NASDAQ: OMP), in which Oasis Petroleum owns a stake of around 45%, nor any of the pipeline partnership’s affiliated companies are included in the bankruptcy filing.

According to the announcement, Oasis expects to emerge from Chapter 11 reorganization in November with approximately $340 million in new borrowing under a new credit facility with a credit ceiling of $575 million. The company also has received a commitment for $450 million in debtor-in-possession financing from its existing lenders.

Under the plan filed by the company, Oasis said it intends to continue operations without interruption and to continue paying employees, royalty interest owners, working interest owners and surface rights owners. The company also “intends to seek Court approval” to pay its vendors for goods and services provided on or after the filing date. Under the prepackaged plan, and subject to court approval, general unsecured pre-petition claims will be paid once Oasis emerges from bankruptcy.

If the plan is approved, existing shareholders will receive four-year warrants convertible to new common stock in Oasis at a fixed price that is still to be determined. Existing shares are virtually certain to be canceled.

The oil patch has been besieged by the economic downturn caused by the COVID-19 pandemic. Global demand has fallen, OPEC+ can’t keep its members in line enough to restrict production, and now Libya has once more ramped up exports. Oversupply due largely to lack of demand is keeping crude prices in a tight range of around $40 a barrel and gasoline prices at around $2.20 a gallon for four straight months.

At Tuesday’s closing price, Oasis had a market cap of about $131 million. At last look, premarket shares had dropped to $0.26, down more than 36% since last night’s closing bell. The stock’s 52-week range is $0.24 to $3.65.

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