Oil company Flying J files for bankruptcy

[WB2YGF]

WOW! You know times are bad when oil companies go under.

NEW YORK (Reuters) - Flying J, a privately held oil producer, refiner and pipeline operator, filed for Chapter 11 bankruptcy protection on Monday, citing weak oil prices and turmoil in the credit markets.

The company listed estimated liabilities between $100 million to $500 million and assets of more than $1 billion, according to documents filed with the U.S. Bankruptcy Court in the District of Delaware.

"With this sudden and unanticipated inability to meet our liquidity needs, we regret that we had no other choice than a Chapter 11 filing to enable us to stabilize our financial base," J. Phillip Adams, its president and chief executive, said in a statement.

Flying J had 2007 sales of more than $16 billion from its interests in about 200 oil and gas wells in the Rocky Mountain region, a 70,000-barrels-per-day refinery in Bakersfield, California, a 35,000-barrels-per-day Utah refinery, 250 retail outlets and a 700-mile refined products pipeline owned by its Longhorn Pipeline Holdings unit.

http://uk.reuters.com/article/gc06/idUKTRE4BL3M020081222

[W3SLK]

That's the price you pay for being too greedy. They obviously over-extended themselves when prices were high.

[VE7 Kilohertz]

Damn! and I just paid my fuel bill to them today. 

Paul

[k4kyv]

Here's something sure to stir up debate that would rival  the global warming/climate change issue, and set off lunatic fringes on both sides.  Do a Google search on "abiotic theory".

For the past century or so, the biological origin of oil seemed to be the accepted norm. However, there remained a small group of critics who pushed the idea that, instead, oil is generated from inorganic matter within the earth's mantle.  The question might have remained within the limits of a specialized debate among geologists, as it has been until not long ago. However, the recent supply problems have pushed crude oil to the center stage of international news.

The debate has become highly politicized and has spilled over from geology journals to the mainstream press and to the fora and mailing lists on the internet. The proponents of the abiotic oil theory are often very aggressive in their arguments.

Could this be based on any real scientific evidence, or is it on par with junk science proposed by the Flat Earth Society or popular theories like the one that claims the earth to be only 6000 years old?

No links for this one, just do a Google search and it will take you to more url's than you would ever have time to visit and read.

[Jim, W5JO]

For the past century or so, the biological origin of oil seemed to be the accepted norm. However, there remained a small group of critics who pushed the idea that, instead, oil is generated from inorganic matter within the earth's mantle.  The question might have remained within the limits of a specialized debate among geologists, as it has been until not long ago. However, the recent supply problems have pushed crude oil to the center stage of international news.

Not too long ago some company drilled in the Western Gulf of Mexico way below 25,000 ft. and found a pool of oil, a quite large one at that.  I forget the exact depth but, when interviewed, the head of the company made the statement that it was too deep to have been generatged from biological material in the normally accepted time frame from dinasoars or plant matter. 

Others poo pooed the idea and that was the last I have heard of that notion. 

[WB2RJR]

As far as Flying J goes, yes, that sometimes happens to people who don't understand the commodity nature of oil and gas. It has gone up and down many times. You have a problem if you bet your future on it only going up.

As far as the non biologic origin of petroleum goes, invest in it if you want NOTHING but social security for your retirement.

I've seen the pitch, and the money lost dumped into it. Even the most ardent Russian supporters still explore for petroleum as a biologic product. The "theory" really doesn't work for finding anything.

BTW plant material tends to produce natural gas, dinosaurs produce nothing, and marine organisms tend to produce oil. This of course is based upom the thermal maturity of an area, normally measured by its vitrinite reflectance to determine if its immature, in the oil window, the gas window, or if it has been overheated to burn it all out. Depth is not the issue, the thermal maturity of the rocks is.

73

Marty WB2RJR

[Opcom]

Dang! they had a decent buffet there. Now the truckers are going to have to go to the TA across the highway (I-20 exit 472), or if unlucky, they might go to the filthy Pilot on Lancaster road south of I-20 with its broken-down pumps, inefficient long lines, broken credit card machines at the registers, drugs, thieves, and strange women. Why is it the decent place goes out of biz while the nastiest one, that no one wants to use, remains.

[WB2YGF]

Dang! they had a decent buffet there. Now the truckers are going to have to go to the TA across the highway (I-20 exit 472), or if unlucky, they might go to the filthy Pilot on Lancaster road south of I-20 with its broken-down pumps, inefficient long lines, broken credit card machines at the registers, drugs, thieves, and strange women. Why is it the decent place goes out of biz while the nastiest one, that no one wants to use, remains.

So far, it's only a chapter 11 reorg.  It's not supposed to affect current retail operations.

1. How does the Chapter 11 filing affect customers of Flying J and its subsidiaries?
Flying J and all of its businesses will conduct business as usual and will continue serving customers in the normal course, throughout the reorganization process. Customers should see no difference in our day-to-day operations. We look forward to continuing to serve your needs.
2. Does this mean that Flying J is going out of business?
Absolutely not! All of Flying J’s current operations are open and serving customers as usual. Our decision to file was purely to address a short-term liquidity issue. We will use the time afforded us from the reorganization process to address the liquidity challenge and expect to emerge as an even stronger company.

[W3RSW]

Sorry to see that happen to 'Flyin J' 
Their signs were a nice change to the usual roadside climate.

Most somewhat 'benign' reorganizations are an attempt to dodge creditors for awhile, in this case perhaps until the economy settles.  Yeah, looks like they forgot about the boom and bust cycle in the oil patch.  Used to be about every 20 years.  The last ride was way too long. This bust was way overdue.

Right Don, we've mentioned on this board before that natural gas, methane outgassing of the planet left over from its origins is one of the major sources of hydrocarbons.  When you look at Jupiter which is predominately methane and ammonia you can see some correlation.  The interior planets have had their atmospheric methane baked off long ago. Jupiter and out (gas giants) have adequate gravity and distance from the sun to retain their lighter gas mantles.

Many decades ago geologists argued the bio-generated vs. interior earth generated theories. Looks like it's never been settled.  Some of these old arguments take on new slants and tributaries as newer measurement methods, detection limits, and combination of discliplines evolve.

[WA1GFZ]

Marty,
Do you think there is oil under the deep ocean? The SOHO project drilled pretty deep, I wonder if they saw any oil?

[flintstone mop]

The heating oil folks are taking a beating with customers cancelling their contracts for the new lower prices for heating oil. It is legal,  and it just requires a small 'buy-out' payment to the company to get out from under the old high price fuel.
Big thing in the N.E. parts of the USA

Fred

[WB2YGF]

The heating oil folks are taking a beating with customers cancelling their contracts for the new lower prices for heating oil. It is legal,  and it just requires a small 'buy-out' payment to the company to get out from under the old high price fuel.
Big thing in the N.E. parts of the USA

Fred

Won't affect my guy.  Many years ago I switched to a COD only oil company and contract with a separate service company for the burner. Much cheaper than the "full service" guys and their creative financing.

[wa2zdy]

Why is it the decent place goes out of biz while the nastiest one, that no one wants to use, remains.

Flying J  was especially decent when they were charging $5.35/gal here during the Hurricane Ike tragedy.  I know the Florida attorney general was pursuing charges for that bit of gouging though I've no further info.

I will agree though about the relative cleanlines of the three named chains.

[Opcom]

I had no idea the diesel went that high. It peaked about $4.60 in TX.