Energy & Exploration Partners Inc. (ENXP), whose operations are centered in East Texas and Wyoming, late Monday filed for Chapter 11 bankruptcy protection to give it flexibility to continue operations. The petition listed debt of $1-10 billion and assets of $500 million to $1 billion.
To fund operations during the restructuring process, the Fort Worth, TX-based independent has secured up to $135 million of debtor-in-possession financing from senior lenders. The voluntary filing replaces an involuntary bankruptcy petition filed on Nov. 25 by creditors Baker Hughes Oilfield Operations Inc. Cactus Pipe & Supply and Schlumberger Technology Corp.
"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 CEO Hunt Pettit, who founded the company. "We appreciate the confidence our lenders continue to place in the company, as demonstrated by their commitment to provide a significant level of additional capital while we work to finalize a restructuring to align our balance sheet with the realities of the current commodity price environment."
The partnership is continuing to manage operations "without interruption, and have taken measures to reduce costs without affecting our ability to operate our business safely and efficiently."
ENXP's leasehold position includes 72,000 net acres in East Texas, where it works the Eaglebine/Woodbine, considered the Upper Eagle Ford Shale north of Houston (see Shale Daily, June 16, 2014). The producer also works in Wyoming's Niobrara and Codell plays in the Denver-Julesburg Basin.
"Energy & Exploration Partners has been and continues to work closely with its suppliers and business partners to ensure its business continues uninterrupted," Pettit said. "The company fully expects to continue producing oil and gas and maintain adequate staff."
In conjunction with the filings, ENXP requested customary relief to support its royalty owners, partners and employees as it restructures and for permission to continue "employee programs and mineral interest owner payments without interruption."
Prior to the Chapter 11 filing, ENXP had begun a workforce reduction "to match its personnel levels with its expected activity levels in the current commodity price environment."
Several senior executives also have resigned, including Robert Karpman, executive vice president (EVP) of business operations and development; David Patty, EVP of acquisitions and divestitures; John Richards, COO; Jim Howe, chief accounting officer; and Brian Nelson, CFO.
John Castellano of AlixPartners LLC has been appointed interim CFO. Other management roles are to be covered by existing personnel during restructuring.
"A stronger balance sheet and financial obligations aligned with the realities of world oil markets will help ENXP protect the value of its assets in the short run, and maximize long-term asset value on behalf of all our important stakeholders," the company said.
An estimated 36 North American exploration and production (E&P) companies with more than $13 billion in cumulative secured and unsecured debt had filed for Chapter 11 protection as of mid-November, according to Haynes and Boone LLP (see Shale Daily, Nov. 24). Onshore E&Ps now restructuring include Samson Resources Corp. (see Shale Daily, Sept. 17), Sabine Oil & Gas (see Shale Daily, July 15), Quicksilver Resources Inc. (see Shale Daily, March 18) and Milagro Oil & Gas Inc. (see Shale Daily, July 16).