Denbury Resources has joined the pile-up of U.S. oil and gas producers filing for bankruptcy protection following a price crash that has decimated the sector.

The heavily indebted Texas-based oil producer said it had agreed a restructuring plan with lenders that would see it eliminate $2.1 billion in debt after recent ructions in the oil market proved the final straw.

“Recently our entire industry has been highly impacted by the global oil demand destruction caused by the COVID-19 pandemic, driving record low oil prices and rapid changes in energy market conditions,” said Chris Kendall, Denbury president and CEO.

“The difficult decision to undertake this financial restructuring process follows a comprehensive review of alternatives, and we believe it is an important and necessary step,” Kendall added.

Denbury—whose operations are based in the Rocky Mountains and Gulf Coast—is the fifth big oil and gas producer to seek bankruptcy protection following a price crash caused by coronavirus destroying demand and a Saudi-Russia price war that sent supply soaring. Twenty-three companies had filed for bankruptcy by the end of last month, according to Texas law firm Haynes & Boone.

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The company has sought to differentiate itself from the rest of the industry by focusing on the use of CO₂ enhanced oil recovery, a technique that involves injecting CO₂ into existing oilfields to force oil towards production wells.

But it has struggled under the weight of a heavy debt load that it had been unable to shake. Total debt at the end of 2019 was $2.3 billion, half of which was due to mature by mid-2022. The move was expected by many in the market, after Denbury skipped a large interest payment earlier this month.

It produced around 56,000 bbl/d of oil in 2019.

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