NOTE: MDN has revised this article (a few hours after releasing it). We orginally said that SM Energy had ended up in bankruptcy court following the aborted deal with Endeavour. That is not correct and we regret the error. SM has not (as far as we can tell) ever been close to bankruptcy. Thank you to an alert MDN reader who pointed out our mistake.
In July 2011 drilling company Endeavour International signed a deal with SM Energy to purchase 50,000 Marcellus Shale acres, three producing gas wells and a pipeline located in McKean and Potter counties in Pennsylvania for $110 million. Five months later Endeavour decided to abort the signed deal. The two sides finally settled 2 1/2 years of lawsuits earlier this year (see Endeavour & SM Energy Settle Lawsuit over PA Marcellus Properties). Why bring it up again? Because we noticed that on Tuesday Endeavour announced they would not make scheduled interest payments on their loans. According to the terms of the loans Endeavour has up to 30 days to pay. They’ve been discussing payback of the loans since June and have not yet come to new terms, so they (arbitrarily?) just decided they would withhold scheduled payments. Is there a pattern here?…
