With more than $42 million in liabilities, the exploration and production company Osage Exploration and Development Inc. filed for Chapter 11 bankruptcy protection this week in federal court.
The company announced the filing on its website, stating, “On February 3, 2016, Osage filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the Western District of Oklahoma in Case No. 16-10308-SAH.”
The firm operates oil and natural gas wells in Logan County but is based in San Diego, California. It closed its Oklahoma City offices last year and has only a handful of employees still on staff. An attorney hired to handle the bankruptcy proceedings indicated that the assets owned in Oklahkoma will be auctioned sometime next month.
“Debtor has been struggling due to the substantial drop in and sustained low crude oil and natural gas prices over the past months,” stated Kim Bradford, President of Osage in the bankruptcy filing. “”Based on Debtor’s current capital structure, liquidity constraints, and inability to raise new capital, it has become necessary for Debtor to seek chapter 11 protection in order to protect and preserve its going concern value and to facilitate a prompt sale of all of its assets for the benefit of all stakeholders.”
One of those stakeholders is a New York-based investment company which is owed $26 million.
Osage was founded in 2004 and became publicly traded two years later. But it was delisted in October of 2015 as the energy downturn expanded across the state and the nation.
“Based on the low projected prices for natural gas and the cost to develop its remaining Oklahoma acreage being at higher than economically viable levels, Osage suspended development of all of its acreage,” stated the company in the bankruptcy filing.
The company stated in the filing that its last well completed was in January of last year.
