GMXR Files For Bankruptcy Protection

Directly from my "snapshot" of GMXR (undated notations in some cases)

• for investors, a reverse stock split in January, 2013
• 34,918 acres (June, 2012, corporate presentation)
• 35,524 (Enercom Conference, August 16, 2011) (new acreage at $2,500/acre)
• Previously: 26,087 net acres (North Dakota and Montana)
• New acreage a bit more southwest of original acreage, Billings County 
• Bakken avg: 1,390 boepd; McKenzie County avg: 1,660 boepd
• Planning to sell some Niobrara acreage; all CAPEX directed to Bakken; 
• Entered the Bakken in early 2011; first rig scheduled for Sept 2011; second rig, Mar 2012
• For investors, note: an $83 stock in 2008; now a $2 stock; a natural gas company trying to re-orient to liquid
• This may be a more interesting company than I first gave credit; it was mostly a natural gas company; then said it was coming into the Bakken; to me it looked like GMXR was using the "Bakken" to attract venture capital; in fact GMXR has been very, very aggressive new permits, activity; I am pleasantly surprised. 

The AP is reporting:

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 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.

It will be interesting to see how this plays out: whether the new owners will form an LLC to continue operating in the Bakken or if they will simply sell the acreage to another Bakken-centric company. I assume those are two of several options. "Anon 1" predicted this outcome, a bankruptcy, some time ago.

I have a long history with GMXR. Before GMXR was in the Bakken I received a phone call from an East Coast media company -- it might have been the Wall Street Journal, I forget -- asking what I knew about GMXR and the Bakken. I had never heard of GMXR before and knowing how expensive it was to drill, I thought it would be a challenge for a new company that was not on my radar scope.

However, unlike "anon 1" I thought GMXR might succeed, but I was wrong. Sad to see. It is important for newbies to see that this had less to do with the Bakken and more to do with the price of natural gas. Chesapeake can relate.