Denver-based Escalera Resources Co., financially strained by weakening commodity natural gas prices, has filed for Chapter 11 bankruptcy protection.
Escalera, which has executive offices in Houston, intends to continue its operations and act as debtors-in-possession under the jurisdiction of the court.
“The company believes the Chapter 11 process will provide the greatest flexibility to pursue viable options for asset sales or other alternatives with the goal of maximizing the value of the company,” officials announced Thursday.
Escalera has assets and liabilities in the range of $10 million to $50 million, according to the filing made Thursday with the U.S. Bankruptcy Court for the District of Colorado.
Societe Generale is the holder of a $36.9 million credit facility, of which about $22 million is unsecured with substantially all of Escalera’s oil and gas producing properties held as collateral, according to court filings. Escalera’s other outstanding debts total just over $3.1 million.
The 22-person Escalera became increasingly cash-strapped and indebted after oil and gas commodity prices tanked, court filings show. The company pursued potential mergers, solicited investors, weighed asset sales and acquisitions, and thinned its operating costs.
Escalera defaulted on its credit facility in May, was able to sell its tight gas reserves and production on the Pinedale Anticline in Wyoming’s Green River Basin. However, a separate asset purchase from Warren Resources hit some roadblocks, officials said in the filings.
About 98 percent of Escalera’s holding are natural gas.
“Escalera is pursuing this Chapter 11 case after exploring all reasonable options,” officials said in the filing, adding that the that company was able to set aside cash to pay employees and continue operating through the reorganization.
Company officials could not be reached for comment.
Alicia Wallace: 303-954-1939, awallace@denverpost.com or @aliciawallace
Updated 11/10/2015 at 2:21 p.m.Because of a reporter’s error, this story misspelled the name of Escalera Resources.
