GMX files for Chapter 11 bankruptcy protection

[April 02, 2013]  NEW YORK (AP) -- 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.

[Associated Press]

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