List of 85 Bankrupt O&G Companies Since 2015; 4 in Marc/Utica

Haynes BooneIn November 2015 MDN brought you a list of 36 North America drillers that had, as of that time, declared bankruptcy (see List of 36 Oil & Gas Companies that Filed for Bankruptcy in 2015). In April, just three short months ago, the list stood at 59 bankruptcies (see List of 59 Oil & Gas Companies Filing for Bankruptcy in 2015/2016). The law firm compiling the list, Haynes and Boone, keeps updating the list. The most recent version was issued on June 30 and it shows the list growing to 85 declared bankruptcies, with more on the way. As of April we noted there was only one Marcellus/Utica driller on the list–Magnum Hunter Resources–which has since emerged from Chapter 11 and is once again up and running. However, in the latest list of 85 bankruptcies, we now must add three more companies with operations in the Marcellus/Utica…
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Gary Evans, Ex-CEO of Magnum Hunter, Starts New O&G Company

Gary Evans
Gary Evans

That didn’t take long. Gary Evan, former CEO of bankrupt Magnum Hunter Resources lost has job as CEO of the company post-bankruptcy, just last week (see Magnum Hunter Emerges from Bankruptcy with CEO Gary Evans Gone). He’s already started a new drilling company–this one aimed at scooping up leases in the oil-rich Permian Basin and Eagle Ford fields of Texas. Apparently the Marcellus/Utica, once the apple of Gary’s eye, has left a bad taste in his mouth. He’s already raising investment capital–from friends and family–for Energy Hunter Resources, as he’s calling it. Gary does love the “Hunter” name…
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Magnum Hunter Emerges from Bankruptcy with CEO Gary Evans Gone

Gary Evans
Gary Evans

UPDATE 5/11/16 – See additional details below from SNL.

Magnum Hunter Resources Corporation (MHR), a driller focused almost entirely on the Marcellus/Utica, announced yesterday the company has emerged from bankruptcy–less than five months after filing (see Sad Day: Magnum Hunter Files for Chapter 11 Bankruptcy). We suppose we should have seen this coming, but we were nonetheless surprised to read that MHR CEO Gary Evans is gone from the company. Currently two of Evans’ lieutenants will serve as co-CEOs while the new board of directors looks for a permanent replacement for Evans. Interestingly (to us), Evans’ name isn’t even mentioned in the press release–as if he never existed. That’s cold. MHR achieved their restructuring by converting what was $1 billion worth of debt into shares of stock, thereby screwing the old shareholders in favor of debtholders (see Magnum Hunter Investors Burned in Bankruptcy Restructuring Plan). Just wave the magic wand and turn debt into equity. Quite a feat. Here’s the announcement from the new bosses (i.e. the new board)…
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Magnum Hunter Investors Burned in Bankruptcy Restructuring Plan

mhrReuters has written a wide ranging article on Magnum Hunter Resources (MHR) and the results of bankruptcy. The article implies MHR is nearly out of bankruptcy now (although it looks to us like a hearing in June will likely be the grande finale). The deal that MHR cut with debtors was to turn their debt into equity–note and bond holders are now stockholders. So MHR CEO Gary Evans now has a new board of directors composed of the new owners of the company. The problem is, the investors who used to hold stock in the company before bankruptcy have essentially lost their ownership–with the value of their previously issued stock now worthless. At least that’s our understanding of how this works (we’re open to being corrected on this). The Reuters article does a close-up of Gary Evans and recounts how he assured investors that a major asset sale was in the works that would save the company–shortly before he had the company file for bankruptcy. Some investors are not very happy with Mr. Evans over what they consider a deceptive practice…
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Dela. Court Approves Magnum Hunter Bankruptcy Restructuring Plan

mhrThe long, slow process of “reorganizing” and emerging from bankruptcy just sped up for Magnum Hunter Resources (MHR). The Marcellus/Utica driller filed for bankruptcy protection in December (see Sad Day: Magnum Hunter Files for Chapter 11 Bankruptcy). Two weeks later the Delaware court, where MHR filed, approved MHR’s initial plan (see Court Approves Magnum Hunter’s “First Day” Bankruptcy Motions). Now, four months later, that same court has given its full approval for the restructuring plan. What is the plan? Essentially MHR will convert outstanding debt held by lenders in a series of “notes” or what we call IOUs, into ownership equity. Noteholders will not be reimbursed the money they invested–instead they will be given shares of stock that they can later cash in to recoup their investments. What about existing common stockholders? MHR doesn’t say, but going by our story yesterday about Seventy Seven Energy’s plans to do the same thing, the value of common stockholders’ shares become essentially worthless (see Seventy Seven Energy Filing for Bankruptcy, Converting Debt into Stock). Here’s the MHR announcement about the court approving their plan…
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List of 59 Oil & Gas Companies Filing for Bankruptcy in 2015/2016

Last November MDN brought you a list of 36 North America drillers that had, as of that time, declared bankruptcy (see List of 36 Oil & Gas Companies that Filed for Bankruptcy in 2015). The law firm compiling the list, Haynes and Boone, is back with an updated version. Since that time more have fallen to low commodity prices for oil and gas. There are now 59 drillers who have declared bankruptcy–42 last year and (so far) 17 in 2016. Fortunately, the only Marcellus/Utica name we spot on the list is Magnum Hunter Resources, which filed for bankruptcy back in December (see Sad Day: Magnum Hunter Files for Chapter 11 Bankruptcy). Here’s the latest edition of Haynes and Boone’s “Oil Patch Bankruptcy Monitor”…
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MHR Wiggles Out of One Midstream Contract, Sues to End Another

Two weeks ago Magnum Hunter Resources (MHR), a driller focused almost exclusively on the Marcellus/Utica and going through bankruptcy protection proceedings, struck a deal with pipeline company Texas Gas Transmission Inc. to terminate four existing contracts with company to use its pipelines. MHR was pressuring Texas Gas to cancel the contracts it has with MHR subsidiary Triad Hunter, but Texas Gas was resisting. In the end Texas Gas agreed to cancel the contracts provided they get a $15 million “unsecured claim” which grants Texas Gas the right to be near the front of the line to get paid $15M when MHR is either sold or emerges from bankruptcy proceedings. MHR isn’t, however, having as much success with canceling signed contracts for another of its subsidiaries in the Bakken Shale region. Bakken Hunter has an existing, signed contract with Oklahoma midstream company Oneok. Citing the recent Sabine Oil & Gas ruling in which that company was allowed to cancel midstream contracts during bankruptcy (see Midstream Nightmare Comes True: Judge Lets Driller Cancel Contracts), MHR is asking a Delaware bankruptcy court to allow them to wiggle out of the Oneok deal. In addition to updates on these two situations, we also have news that the Securities and Exchange Commission is at least partially blaming two former Magnum Hunter employees–a chief financial officer and chief account officer–for the company’s financial predicament…
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Another Sad Day: GreenHunter Resources Files for Bankruptcy

greenhunter resourcesIn December we reported the sad news that Magnum Hunter Resources (MHR) finally had to file for Chapter 11 bankruptcy protection (see Sad Day: Magnum Hunter Files for Chapter 11 Bankruptcy). MHR has a variety of subsidiary companies. One of those companies, Eureka Hunter (midstream/pipelines) has so far stayed out of bankruptcy court. But a sibling to Eureka Hunter, GreenHunter Resources (water and wastewater) has now succumbed. Yesterday GreenHunter issued a statement (below) that it and its myriad of (on paper) subsidiary companies have filed for “reorganization” under the Chapter 11 bankruptcy law. GreenHunter owns injection wells in both West Virginia and Ohio and was hoping to barge frack wastewater/brine to those wells as a cheap form of transportation. Last week the U.S. Coast Guard effectively put an end to that dream (see Coast Guard Caves to Political Pressure, No Wastewater Barging). Is it coincidence that GreenHunter has now filed for bankruptcy? Perhaps, but we’re suspicious. GreenHunter wouldn’t be the first company the Obama Administration has driven out of business…
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The Dismal Outlook for Marcellus/Utica Drilling in 2016

Yes, it’s bad out there and getting worse–at least in the short term–when it comes to drilling in the Marcellus and Utica Shale. Several major drillers in the northeast have announced cuts–big cuts–and those cuts will impact not only the employees at those companies, but also the many supply chain companies that provide goods and services to them. There were a paltry 19 rigs operating in Pennsylvania last Friday. In January 2014, just two years ago, there were 55 active rigs working in the PA Marcellus. Here’s a recap of who’s cutting how much in 2016 (and perhaps beyond)…
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Court Approves Magnum Hunter’s “First Day” Bankruptcy Motions

Two weeks ago MDN brought you the sad news that Marcellus/Utica driller Magnum Hunter Resources (MHR) has filed for Chapter 11 bankruptcy protection (see Sad Day: Magnum Hunter Files for Chapter 11 Bankruptcy). A few days after filing, MHR reported (see below) that the courts have already approved all “first day” motions related to the bankruptcy. The upshot is this: the courts have approved MHR’s plans that allow the company to continue to make payroll, pay royalty payments to landowners, and continue to work on getting a $200 million bridge loan to keep it all going. Here’s the details…
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Sad Day: Magnum Hunter Files for Chapter 11 Bankruptcy

If you’ve read MDN for any length of time, you know since February of this year we’ve been hinting and warning that Magnum Hunter Resources (MHR) was heading for bankruptcy (see 19 Oil/Gas Companies on “Death List” – 8 are in Marcellus/Utica). Yesterday MHR, a driller totally focused on the Marcellus and Utica Shale, filed for bankruptcy. We consider it a sad day. Continuing low commodity prices coupled with more than $1.1 billion in outstanding debt (the biggest portion being unsecured IOUs or “notes” due in 2020–some $634.6 million worth), finally led the company to file for Chapter 11 bankruptcy protection. MHR says three-fourths of their debt-holders are on board with the bankruptcy filing and also on board with MHR seeking a new $200 million bridge loan to keep operating. Just about all of MHR’s various subsidiary companies are listed in the bankruptcy filing–except for Eureka Hunter, MHR’s midstream/pipeline business. Eureka Hunter is not part of the filing (for now) which likely explains the press release issued just a few days ago promoting Eureka Hunter’s latest stellar performance (see Magnum Hunter De-Listed from NYSE; Still Shopping Eureka Hunter). Here’s the sad news from MHR…
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Magnum Hunter De-Listed from NYSE; Still Shopping Eureka Hunter

Magnum Hunter Resources (MHR) is a company in trouble. We won’t recount all of the signs (read our MHR articles here). One of the silver bullets that was supposed to help pull MHR’s bacon out of the fire was the sale of their midstream/pipeline subsidiary Eureka Hunter. On August 14 MHR CEO Gary Evans announced there were three potential buyers for Eureka Hunter and that a deal would net the company somewhere around $600-$700 million. Evans said a deal was imminent. That deal never materialized. In November the company refinanced some of its debt to keep going and stopped holding quarterly conference calls with investors (see Magnum Hunter Refinances Again, Dodges a Bullet…Just Barely). Also in November, MHR told the Securities and Exchange Commission that the company is likely headed for bankruptcy (see Dire Straits: Magnum Hunter Tells SEC Heading for Bankruptcy). However, one of MHR’s investors has stated he’ll sue to prevent them from filing for bankruptcy (see Magnum Hunter Investor: We’ll Sue to Stop Bankruptcy Filing). Yeah, it’s complicated. So when we saw a new press release from MHR, a press release about Eureka Hunter, we perked up. What does it say?…
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How Much is Magnum Hunter & Eureka Hunter Worth Today?

Valuing an oil and gas or midstream/pipeline company is probably as much art as it is science. In any real estate or land or business valuation, in fact in any kind of transaction where something is bought and sold, something is worth as much as someone is willing to pay for it. But we all need guidelines…rules of thumb…markers that help us determine how much value something has. The “thing” under consideration in this post is the value of both driller Magnum Hunter Resources, and its midstream subsidiary Eureka Hunter. A stock analyst writing on the Seeking Alpha website tackled that question and came up with some interesting numbers…
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Magnum Hunter Investor: We’ll Sue to Stop Bankruptcy Filing

Dallas Salazar
Dallas Salazar

A developing situation with Magnum Hunter Resources (MHR). As you know, analysts we’ve read believe MHR is about to file for bankruptcy. In fact, MHR itself indicates bankruptcy is a very real (likely?) option, judging from comments they make in a recent filing they made with the SEC (see Dire Straits: Magnum Hunter Tells SEC Heading for Bankruptcy). However, one of MHR’s largest stockholders, Dallas Salazar, CEO of Austin, TX-­based Atlas Consulting, is telling MHR to hold on (see Activist Investor Threatens Magnum Hunter with Takeover Unless…). Salazar and a growing list of supporters will fight an MHR bankruptcy tooth and nail. Salazar has assembled a team of investors who will sue MHR should the company file for bankruptcy. Salazar’s legal team is the same team that previously (and successfully) sued Washington Mutual on behalf of shareholders. Salazar, in very frank language, has sent a letter to MHR management to let them know bankruptcy is not an option (see the letter below)…
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GreenHunter Board Member Sells All of His Company Stock

GreenHunter Resources, the wastewater subsidiary of Magnum Hunter Resources (MHR), has essentially become a penny stock. Parent company MHR is close to declaring bankruptcy (some are saying it’s all but a formality at this point). MRH’s status seems to be weighing on its subsidiary companies, like GreenHunter. One of the members of the Board of Directors for GreenHunter, Ronald H. Walker, sold 196,470 shares of company stock he owned last Wednesday and Thursday. That is, he sold ALL of the stock he owned in GreenHunter–every last share. What did he get for all of those shares? A measly $35,364.60. Next to nothing. It averaged 18 cents per share. What does Walker know that we should know?…
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GreenHunter Res. 3Q15: Net Loss Decreases, Brief MHR Mention

Yesterday GreenHunter Resources, the wastewater subsidiary of Magnum Hunter Resources (MHR), filed its third quarter 2015 financial and operational update. GreenHunter also held an earnings/analyst conference call to discuss the company’s performance in the last quarter and to look ahead at what’s coming. The company continues to lose money, but the money they’re losing is less now than it was a year ago–and the numbers are not all that big in the scheme of things. GreenHunter lost $1.3 million in 3Q15, compared to a $3.9 million loss in 3Q14. Things are getting better financially for the company. The two things we were most interested in were (1) any mention of the lawsuit they launched against two former vice presidents who allegedly conspired with a competitor against the company (see GreenHunter Sues 2 Former VPs + OH Competitor for Conspiracy); and (2) any word about GreenHunter’s parent company MHR and an impending declaration of bankruptcy (see Dire Straits: Magnum Hunter Tells SEC Heading for Bankruptcy). In scouring the press release (below) and transcript of the analyst call (portions below), we found only a single very brief reference to MHR’s problems, and nothing about the lawsuit…
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