Enduro Resource Partners, an oil and natural gas exploration company founded in 2010 by the prominent Fort Worth father-and-son team Jon Brumley and Jonny Brumley, has filed for bankruptcy reorganization as the company prepares to sell its holdings in six states.
The company has been "undermined by persistently low oil and gas prices during the past several years," Kimberly Weimer, Enduro's chief financial officer, said in the documents, filed in Delaware Tuesday. Enduro's debt, she said, "became insurmountable."
The filings did not list a total amount of the company's debt.
"Like many other upstream energy companies, (Enduro) did not anticipate in the early part of this decade that they would eventually succumb to the demands of repaying the capital they borrowed to invest in their exploration and production activities," Weimer said.
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Crude oil prices and natural gas have "declined dramatically" since mid-2014, about the time OPEC started to increase its supply on the world market weakening demand, the filing said.
Enduro has oil and gas properties in Texas, North Dakota, Louisiana, New Mexico, Wyoming and Montana.
Enduro sank $26 million more into the company in 2016, but it wasn't enough. The company was unable to restructure its debt, the filings said.
By September 2017, Enduro realized it wouldn't be able to pay $208.7 million owed to Bank of America by March 30 of this year. It also owes $141.2 million to Wilmington Trust, documents said.
The company will continue to operate as it sheds its assets. The petition includes five Enduro subsidiaries and affiliates. It does not include Enduro Royalty Trust, a publicly traded Delaware trust formed in 2011.
In September 2017, Enduro sold some of its oil and gas properties in the Permian Basin in Texas and New Mexico for $49.1 million. In January, the company started the sale process. The properties are divided into four packages. Enduro has already secured stalking horse bidders for three of those packages. Those bids would bring $96.6 million, the filings said.
An auction is scheduled for July 19 to see if other bidders will emerge.
Enduro employs 70 workers, of which 42 are in the Fort Worth headquarters at 777 Main in downtown Fort Worth. The company is offering bonuses to 35 employees, totaling $1.5 million, to stay on during the bankruptcy. The younger Brumley served as chief executive officer of Enduro. The senior Brumley was said to be a significant investor in the firm.
The company also owes nearly $4 million to its top 30 creditors, including $511,372 to Oklahoma City-based Chesapeake; $262,258 to XTO Energy in Fort Worth, and $80,339 to Pioneer Natural Resources in Irving. Enduro also owes the state of Wyoming $362,195 in royalties, the filing shows.
In 2010, the Brumleys sold Encore Acquisition Co. to Denbury Resources in a deal valued at $4.5 billion, a company they founded in 1998. The men were featured on the cover of Forbes magazine in 2005 after being honored as entrepreneurs of the year for launching Encore.
The senior Brumley was CEO of Southland Royalty Co. and co-founder of Cross Timbers Oil, which became XTO Energy, now owned by ExxonMobil. Brumley was also CEO of Mesa Inc., formerly headed by legendary Dallas oilman Boone Pickens.