California Resources Corp. is in talks with lenders for a financing package of up to $600 million to carry the oil and gas company through a planned bankruptcy proceeding, the Wall Street Journal reported on May 13, citing people familiar with the matter.

California's biggest oil producer has been seeking a bankruptcy loan of $500 million to $600 million, though the talks are still fluid and the amount could change, the report said.

A fall in economic activity due to the COVID-19 pandemic and a price war between top oil producers Russia and Saudi Arabia has hurt oil prices, with U.S. crude falling about 60% this year and dropping below $0 for the first time in history last month.

The Los Angeles-based company had earlier raised doubts about its ability to continue as a going concern. It entered into an amendment to reduce revolving loan limit to $900 million from $1 billion.

The company declined to comment on the report, but reiterated it was in talks with its lenders for a resolution that would allow it to continue its business.

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