GMX files for Chapter 11 bankruptcy protection
From the Houston Chronicle.
Oil and gas producer GMX Resources Inc. said Monday that it filed for Chapter 11 bankruptcy protection, blaming low prices for natural gas.
The Oklahoma City company filed in the Western District of Oklahoma. The filing includes its Endeavor Pipeline and Diamond Blue Drilling units. It does not include Endeavor Gathering LLC, a business in which GMX holds a 60-percent interest.
GMX says it pursued several strategies to increase oil production, make its supply chain and production more efficient, and reduce costs. However the price of natural gas has remained low and the company’s oil and gas businesses require more spending. GMX said it hasn’t been able to find any long-term solutions to its financing needs.
GMX says it agreed to sell its operating assets and undeveloped acreage to the owners of company senior notes that are due in 2017. Those assets will later be subject to a public auction.
The senior note holders have committed $50 million in debt financing to cover its operating expenses.
The company expects the New York Stock Exchange to begin delisting procedures for its stock. It does not plan to contest those proceedings.
Shares of GMX Resources have traded between $1.80 and $21.84 in the last year, and they closed at $2.19 on Friday.
Views: 3150
Replies to This Discussion
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Permalink Reply by Skip Peel - Mineral Consultant on -
The concept is simple and does not require cooperation amongst producers. We are seeing it in action now but it's subtle.
http://www.naturalgas.org/shale/growingshare.asp
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Permalink Reply by adubu on
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I think we can agree on one thing that it is supply/demand that controls prices which has many variable in both not just one factor except sometime one thing will have major roll to play at certain times. This variables change with time. Your analysis on the Shale is correct but it's the market that indirectly results in cooperation among producers.
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Permalink Reply by adubu on
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Skip---interest in the above article EIA predicts Shale gas 12.2 Tcf gas 47% of Nat gas produced by 2035 ---question is not 26Tcf what US production is today? No increase in annual production next 23years --What wrong with these numbers am I missing something?
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Permalink Reply by Krkyoldhag on
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What OPEC does is price fixing...that is illegal or is supposed to be here in USA so how would it work?
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Permalink Reply by Skip Peel - Mineral Consultant on
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There are two points here that are important. First the production profile of a shale gas well is much different from a conventional gas well. And second that as the percentage of annual domestic production represented by shale gas increases decline rates will begin the figure into overall supply. All these fields will have long lived production. Once the drill to retain leases period is done producers can much better manage supply by how many new wells they drill. If prices get too low they will simply drill fewer wells. The rapid decline associated with shale gas will mean the supply will drop more quickly. With conventional gas and long shallow decline curves supply does not adjust quickly unless operators are willing to shut in wells.
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Permalink Reply by adubu on
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Skip---- now that we have seen few years of data on the HA what do you think the revision of the EUR of these wells may produce. It appears to maybe be > that the 6-8 Bcf originally stated if these well do have a long life of >20-25 years even with the 80-90 % decline in first few years. I am seeing some Bossier Shale wells in the Shelby Trough after making 3-4 Bcf in first 2-3 years still flowing 3 mmcfd.
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Permalink Reply by Skip Peel - Mineral Consultant on
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EUR is variable across the HS Play. And restricted choke programs are widely in use. Still even the most conservative estimates support 80+ percent decline in first two years. The decline curve is very flat thereafter. Productive life is still a guesstimate at this time. Commercial life even more so.
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Permalink Reply by adubu on
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Skip--- based on your experience and knowledge --what is you best estimate ( guesstimate) of EUR range with top of range the"sweet spots" and lower end in margin area---- assuming well is maintained correctly. Just IYO Only. Understand I will not throw it back at you one day in distant future if I am still around.
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Permalink Reply by Skip Peel - Mineral Consultant on
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That question would be better asked of Jay.
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Permalink Reply by Skip Peel - Mineral Consultant on
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You can ask him. He won't bite. LOL!
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