After months of trying but failing to sell-off a series of assets or execute other meaningful deals to cure its leveraged balance sheet, Magnum Hunter Resources Corp. has hired financial and legal advisers to explore “strategic alternatives,” indicating that it would solicit all possible offers.

The company said late Friday that it has hired PJT Partners LP, an affiliate of the global investment firm Blackstone, “regarding potential strategic alternatives to enhance liquidity and address the company’s current capital structure.” A financial and strategic advisory services firm, PJT specializes in restructuring and reorganization. Kirkland & Ellis LLP has also been hired as a legal adviser as Magnum considers its options.

Those options, however, appear to be increasingly narrow. Magnum has been confronting dwindling cash-flow in recent years, with liquidity tightening in its transition to an Appalachian pure-play despite a series of noncore assets sales in Canada, Texas, North Dakota and West Virginia (see Shale Daily, May 26; Jan. 23; April 22, 2014).

Since the beginning of the year, it has promised but failed to deliver on a $430 million Utica Shale joint venture; the sale of its marquee, 175-mile natural gas gathering system in Ohio and West Virginia; and other ideas such as having a third party assume some of its transportation liabilities to help free up credit (see Shale Daily, Aug. 11; June 25). In the meantime, its credit rating has been downgraded, its executive ranks have been shuffled, its drilling program has been suspended and its stock — like other energy companies — has fallen precipitously.

Making matters worse, the company, along with three of its subsidiaries, agreed last week to an $18 million wrongful death settlement for a 2013 pipeline fire that killed a worker in Tyler County, WV. Magnum and its subsidiaries, Triad Hunter LLC, Transtex Hunter LLC and Eureka Hunter LLC, agreed to the settlement. Exterran Energy Solutions LP, Apex Pipeline Services Inc. and Western Oilfields Supply Co. Inc. are also parties to the settlement. Bruce Phipps was killed in a flash fire that severely burned two others at a Eureka Hunter pig launching station (see Shale Daily, April 15, 2013). Phipps’ widow filed the lawsuit in Ohio County Circuit Court.

As part of its decision to hire financial and legal advisers, Magnum said it would suspend the monthly dividends on its 10.25% Series C Preferred stock, 8% Series D Preferred stock and 8% Series E Preferred stock. The suspension is effective for the dividends payable Oct. 31 and is expected to continue indefinitely.

In August, Magnum announced a non-binding agreement with an undisclosed private equity fund to farm-out 28,500 net acres in the Marcellus and Utica shales under a possible $430 million joint venture. It said at the time that it expected to close the deal by September or October at the latest. It also said in June that it would sell its midstream subsidiary Eureka Hunter Holdings LLC for up to $600 million as soon as possible. Those deals have not yet materialized, however. The company has since hired a new vice president of finance and capital markets with experience in mergers and acquisitions and a new chief operating officer.

When Magnum took its second lien term loan in late 2014, its borrowing base was lowered to $50 million. Until it raises more cash and the second loan is paid off, it seems unlikely its credit facility would be increased. Financial analysts are also expressing concerns about its margins in Appalachia, where its assets account for 90% of proved reserves, if it can deleverage its balance sheet and move beyond the liquidity crisis.

The company offered few details when it announced the hiring of advisers, saying only that it would continue to “develop and explore all potential alternatives.”