Energy & Exploration Partners of Fort Worth is seeking Chapter 11 bankruptcy protection after suppliers and service companies sought payment for tens of millions of dollars in unpaid bills.
Energy & Exploration Partners and Energy & Exploration Partners Operating filed for bankruptcy late Monday in Fort Worth. It made the filings after Schlumberger Technology, Baker & Hughes and Catcus Pipe & Supply initiated an involuntary bankruptcy against the firm on Nov. 25.
Energy & Exploration joins several other companies reorganizing in bankruptcy court as oil prices continue to tumble below $40 a barrel following OPEC’s pledge to keep pumping at record levels, adding to the glut of oil on world markets.
In its filing, Energy & Exploration listed debts of $1 billion to $10 billion and assets of $500 million to $1 billion, while the operating company listed assets of up to $1 million and liabilities between $500 million and $1 billion, court records show.
“We have taken this difficult, but necessary step in order to provide adequate time to complete ongoing discussions and processes with our lenders to restructure our balance sheet and create a strong financial foundation for the future,” said Hunt Pettit, Energy & Exploration Partners’ chief executive officer.
Among the biggest creditors listed by Energy & Exploration Partners were U.S. National Bank Association at $388.8 million and Chesapeake Exploration at $23.3 million. The operating company reported owing Nabors Drilling in Houston $2.8 million; Cactus Pipe & Supply $2.2 million, Schlumberger $1.9 million and Baker Hughes $1.1 million.
Founded in 2008, Energy & Exploration owns about 61,000 net acres in Texas and Wyoming, with the Texas holdings located mostly in East Texas in the Woodbine and Eagle Ford shales, according to court records.
Interim Chief Financial Officer John Castellano said in court documents that while the company has many valuable assets, its operations have been “significantly impacted by the dramatic decline in global oil prices, the continued low price of natural gas and general uncertainty and dislocation in energy markets.”
Castellano, a managing director for AlixPartners, a restructuring firm hired by Energy & Exploration in October, also said the “unprecedented amount of rainfall in Texas” caused the company to “shut-in” wells, having a “severe and negative impact” on operations.
Other energy companies are in a similar financial pinch.
Fort Worth-based Quicksilver Resources, which filed Chapter 11 bankruptcy in March, will go on the auction block next month. Quicksilver, a big player in the Barnett Shale and other natural gas fields before prices slumped, reported $1.21 billion in assets and $2.35 billion in debts.