Driller becomes 18th to seek bankruptcy in Texas

HOUSTON — A North Texas oil company that went public around the time crude prices started slipping in 2014 is seeking Chapter 11 bankruptcy protection, becoming the 18th driller in the state to succumb to the downturn.

Energy & Exploration Partners, a Fort Worth company that drills for oil and gas mostly in East Texas and in Wyoming, said capital markets have closed to producers in the wake of $40 oil, leaving it unable to raise to funds that could have prevented bankruptcy.

“The impact of the depression in oil prices on the debtors’ business cannot be overstated,” John Castellano, a managing director at turnaround specialist AlixPartners and the company’s interim chief financial officer, said in court documents.

U.S. crude sank as low as $36.64 per barrel on Tuesday before recovering to $37.88 per barrel in early trading on the New York Mercantile Exchange. And international Brent dipped 43 cents to $40.30 per barrel on the ICE Futures Europe, briefly trading under $40 per barrel for the first time since early 2009.

In addition to sunken crude prices, massive storms this summer cut off roads leading to Energy & Exploration’s East Texas oil fields near the Trinidad River, crimping nearly half of the company’s crude production more than a year after the firm took out debt to partially fund a $700 million purchase in the region.

The firm recently cut 15 employees and saw several managers resign, including the company’s chief operating officer, its top acquisition and divestiture coordinator, its chief accounting officer and its chief financial officer.

In court papers, the company indicated it had up to $500 million in assets and more than $1 billion in liabilities. It had 59 employees.