An energy company that owns hundreds of natural gas wells south of Silt is back in bankruptcy court.
Houston-based Vanguard Natural Resources has voluntarily filed for Chapter 11 bankruptcy protection as it again seeks to reorganize to deal with high debt.
Vanguard also went through bankruptcy proceedings in 2017, at that time shedding about $850 million in debt.
As of the third quarter of last year, Vanguard was producing an average of 70 million cubic feet a day in the Piceance Basin where, as of the second quarter, it had some 950 wells. The Houston-based company has holdings in several states.
It had warned late last year that it faced the possibility of going into default.
According to bankruptcy court filings, the company had about $470 million in revenue last year.
It has about $1.48 billion in assets and $1.2 billion in debts, with between 1,000 and 5,000 creditors, the filings show. Among its 50 largest unsecured creditors is Basic Energy Services, which is shown in a filing to have a Grand Junction address and is owed more than $193,000.
Vanguard had about $8.6 million of liquidity as of its bankruptcy filing, it reported. That's down from about $39 million late last year.
In its filings, Vanguard cited volatile oil and gas prices in recent years and said more than 100 oil and gas companies have filed for Chapter 11 since the start of 2015.
Vanguard has sold assets in several areas to try to shore up its finances, but says that prevailing market forces meant some sales prices were lower than originally expected, and much of the proceeds were used to pay down debt and didn't improve liquidity.
The company has said the Piceance Basin is one of its core assets and hasn't been part of its divestiture plans. While it generally has done little drilling locally since acquiring the Piceance Basin assets from Bill Barrett Corp. several years ago, last year it drilled and completed 14 wells in the area in a project it had estimated would cost up to $26 million.
It said then that it planned to analyze the results and evaluate next steps for future development in the area.
Vanguard has obtained a commitment for $130 million in debtor-in-possession financing underwritten by Citibank to help it continue operating during bankruptcy. It has filed court motions that it says should generally let it operate as usual, including paying wages and employee benefits, royalties to mineral owners, and expenses associated with drilling and completions, gas processing and other activities.
R. Scott Sloan, Vanguard's president and chief executive officer, said in a news release, "The restructuring steps that we have announced … are necessary to attain a capital structure which is suitable for Vanguard's assets and future business strategy. We are now focused on expediting an efficient in-court restructuring, maintaining our operational momentum and upholding our obligations to our employees and vital vendors and stakeholders."
Vanguard has nearly 300 employees.
The company has set up a toll-free hotline to answer employee, vendor, investor and royalty owner questions, available weekdays during business hours at 844-216-9850. More information also may be found at www.vnrenergy.com/restructuring.
Colorado Oil and Gas Conservation Commission records show Vanguard currently has a $100,000 bond in Colorado intended to cover plugging of wells by the state should it be financially unable to do so. The state allows companies to post a blanket bond of $100,000 for 100 wells or more, rather than bonds of up to $20,000 per well depending on their depth.