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Shares of This Once $23 Billion Oil Company Just Cratered 54%. Here’s Why

April 4, 2017, 4:16 PM UTC

Even as OPEC begins to make progress cutting global oil output, the damage has already been wrought for Seadrill shareholders.

Investors sent shares of the oil drilling company down 54% in trading on Tuesday, after the company warned shareholders and bond investors that it will likely file for bankruptcy in the U.S. or U.K. Additionally, the company warned investors it has substantial debt load that will be costly to restructure — meaning investors should expect lower returns than what they currently see on Seadrill’s stock price.

“As a result, the Company currently expects that shareholders are likely to receive minimal recovery for their existing shares,”Seadrill said in a statement Tuesday.

Seadrill has struggled alongside most of the energy industry as the price of crude oil has fallen dramatically since 2014. Seadrill’s market capitalization was once $23.7 billion in late 2013. Now the company’s value is down a whopping 98% to just $397.6 million. That’s because as oil prices fell, demand for Seadrill’s services also fell off a cliff — making it far harder for the company to pay off its debts.

By the end of of 2016, the company was reporting current liabilities exceeding its current assets by nearly double. In total, the company held some $8.5 billion in total net interest bearing debt.

In the same statement Tuesday, Seadrill also noted that it had extended key dates in relations to the restructuring, allowing the company to implement the restructuring plan starting July 31 rather than April 30.