Houston’s Vanguard Natural Resources filed for bankruptcy protection Thursday as the number of energy companies taking the Ch. 11 route continues to pile up at the end of the two-year oil bust.
Vanguard, a 10-year-old exploration and production company, said its restructuring agreement with debt holders is intended to cut $708 million of Vanguard’s $2.3 billion debt. The company’s existing debt exceeds the value of its assets.
“With a successful restructuring of our balance sheet, Vanguard will be better positioned to weather this new lower for longer commodity price environment, while also improving our long-term financial security and better position us for long-term success,” said Vanguard Chief Executive Scott Smith in the announcement.
More than 240 North American energy companies have filed for bankruptcy during the oil bust, nearly half of which are based out of Texas, according to a list compiled bu the Haynes and Boone law firm.
Vanguard went on a buying spree in the spring of 2015 when it was believed the oil bust was much shorter lived. Vanguard acquired Houston-based LRR Energy for more than $250 million and then bought Houston’s Eagle Rock Energy Partners for $474 million. But the bust lasted for another 18 months or so as the size of Vanguard’s debt grew.
Last year, Vanguard sold about $280 million worth of Oklahoma oil patch holdings to Titanium Exploration Partners to cut into its debt. In all, Vanguard said it reduced its debt load by more than $500 million in 2016, but Smith acknowledged it wasn’t enough.