Calgary-based oil and gas producer Lightstream Resources says it is moving to a court-supervised sale after it was unable to reach a settlement agreement with debt holders.

The company said Monday it would be seeking to enter protection from creditors under the Companies' Creditors Arrangement Act.

Lightstream has been struggling under close to $1.2 billion in debt and was under a Sept. 16 deadline to reach a deal with lenders.

With no deal in sight, Lightstream says it has to end a proposed plan that would have given debt holders 95 per cent of the company and would instead look to sell the company under a court-supervised process.

The company said trading of its stock has been halted and that the Toronto Stock Exchange will start the process of its delisting.

Lightstream is focused on light oil in the Bakken and Cardium formations, which underly several states and provinces including Saskatchewan and Alberta.