TransTexas Gas Corp. of Houston said following discussions witha group representing a majority of its parent company’s noteholders it voluntarily filed for Chapter 11 bankruptcy. The companysaid it believes the filing will allow for completion of itsrecapitalization involving TransTexas and parent, TransAmericanEnergy Corp. Details of the recapitalization plan are expected tobe filed in bankruptcy court within 30 days.

TransTexas said it expects to reach agreement with certain noteholders for debtor-in-possession financing, subject to approval bythe court. Among other capital needs, the financing will allowTransTexas to continue drilling its development areas, includingthe Eagle Bay gas field, producing fields in Wharton County, TX,and other South Texas properties.

TransTexas said it believes it can improve cash flow throughdevelopment drilling in proven producing fields and, with thecommitment of its major creditors, seek court approval of arestructuring plan. Going forward TransTexas said it will pay allvendors in the ordinary course of business.

For the quarter ended Oct. 31, 1998, TransTexas reported a netloss of $147.8 million on revenues of $32.8 million. The resultsinclude the impact of a $164.9 million pre-tax asset write-down toreflect low oil and gas prices. For the quarter ended Oct. 31,1997, TransTexas reported a net loss of $1.2 million on revenues of$37.2 million.

For the nine months ended Oct. 31, 1998, including the effect ofasset impairments of $186.7 million, TransTexas reported a net lossof $155.4 million on revenues of $137.7 million compared to netincome of $247 million on revenues of $695 million for the year-agoperiod, which included a gain of $540.4 million on the sale of thecompany’s Lobo Trend subsidiary

Last month, TransTexas said it hired Jefferies & Co. toreview strategic alternatives. At the same time the company said itwas seeking concessions from its note holders.

TransTexas Gas is engaged in the exploration, production andtransmission of gas and oil, primarily in South Texas, includingthe Eagle Bay field in Galveston Bay. The first four wells drilledin Eagle Bay are producing about 75 MMcf/d (gross) of gas and 9,500b/d (gross) of condensate. TransTexas owns an approximate 56.75%net revenue interest in the Eagle Bay field.

©Copyright 1999 Intelligence Press Inc. All rights reserved. Thepreceding news report may not be republished or redistributed, inwhole or in part, in any form, without prior written consent ofIntelligence Press, Inc.