ORANGE COUNTY

Wright Energy Corp. and its creditors Wednesday agreed to begin negotiating a settlement and place a moratorium on further legal action in an attempt to restructure the tiny, ailing Newport Beach oil company.

Wright, which has debts of about $26 million, filed for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code in March, 1984. Wright is typical of many petroleum companies that sprang up during the domestic oil drilling boom of the late 1970s and early 1980s. Many companies borrowed heavily to expand and have perished in the wake of falling oil prices. Wright’s major asset is a Kentucky oil field.

At the hearing Wednesday, U.S. Bankruptcy Judge Ralph Pagter denied motions by Whittaker Corp. and Barclays Bank International Ltd., to begin foreclosure proceedings and liquidate the oil company. Wright, which once planned to merge with Whittaker, owes the Los Angeles-based conglomerate about $10 million. Wright owes New York-based Barclays about $14.2 million.

“We hope we can sit down and see if we can find some common ground,” said Barry Jacobs, Wright’s attorney. “We’ve got no place to go but up.”

If no agreement is reached in a reasonable amount of time, the judge said any party can request another bankruptcy court hearing on 30 days notice. Officials at Whittaker Corp. and Barclays Bank were unavailable for comment.