Dafora Medias, the largest onshore drilling company in Romania, has decided to file for insolvency, as it has large difficulties in paying off its debt, the company announced on Wednesday, June 3.

Dafora was hit by American group Chevron’s decision to pull out of its shale gas operations in Eastern Romania, and by OMV Petrom’s decision to reduce its onshore drilling operations. OMV Petrom and Chevron were two of Dafora’s biggest clients, alongside gas producer Romgaz.

The company also took a EUR 900,000 fine from Romania’s Competition Council, for its involvement in bid-rigging, which strongly impacted its financials and led it to file for insolvency, the company explained in a note to investors.

Dafora Medias, which is controlled by Romanian businessman Gheorghe Calburean, had EUR 45 million in revenues, in 2014, 27% higher than in the previous year. The company also strongly reduced its losses, from a stunning EUR 35 million in 2013 to EUR 0.43 million in 2014. However, its total debt at the end of 2014 stood at EUR 78 million, which was 1.3 times the value of its assets.

The company’s loans from banks and leasing companies totaled almost EUR 44 million. In mid-May, Dafora announced it reached an agreement with financial creditors to postpone some of its due payments. However, the company couldn’t come to an agreement with the state to postpone paying its fiscal debt, which amounted to some EUR 2.7 million.

Dafora Medias is listed on the Bucharest Stock Exchange. The company is currently valued at some EUR 3.5 million.

Andrei Chirileasa, andrei@romania-insider.com