Feb. 05--Osage Exploration and Development Inc. on Wednesday filed for Chapter 11 bankruptcy protection, citing low oil prices that have cut into the company's cashflow.
Osage operates oil and natural gas wells in
and has working and royalty interests in other wells throughout the region.
Those assets are expected to be sold at auction around the end of March, said Mark Craige, an attorney at Crowe and Dunlevy in
who is representing Osage in the bankruptcy proceedings.
"We want to have the deal closed by the middle of April," Craige said.
, Osage was founded in 2004 and became publicly traded in 2006. The company in October 2015 voluntarily delisted its common stock from the Nasdaq Over The Counter Bulletin Board.
Osage closed its
office last summer. The company has four employees in
The company said it has about $42.5 million in liabilities, including about $26 million owed to a
-based investment company.
Low prices blamed
Low oil and natural gas prices over the past 18 months eliminated the company's cashflow and ability to raise money, Osage said this week in documents filed in bankruptcy court in
"Based on the low projected prices for natural gas and the cost to develop its
acreage being at higher than economically viable levels, (Osage) suspended development of the all of its acreage," the company said in the bankruptcy filing. "The last well was drilled, completed and brought online in January 2015."
Low oil prices and reduced cashflow are threatening companies throughout the oil patch, Craige said.
"If an E&P (exploration and production) company today has borrowed a lot of money, it's going to be really hard to recover unless the lenders are willing to take very low payments for however long it takes for oil prices to go up," Craige said. "I'm afraid we will see quite a few of these."
CONTRIBUTING: Business Writer Brianna Bailey
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Source: Equities.com News
(February 4, 2016 - 8:09 PM EST)
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