TXCO Resources Files Voluntary Bankruptcy Petition under Chapter 11
May 18 2009 - 8:12AM
Business Wire
TXCO Resources Inc. (Nasdaq:TXCO) today announced the Company
and its subsidiaries have filed voluntary petitions for relief
under chapter 11 of the U.S. Bankruptcy Code in the United States
Bankruptcy Court for the Western District of Texas.
The filing was precipitated by a series of events that led to a
contraction in TXCO�s liquidity, impairing its ability to operate
its business. The Company has continued to experience substantial
difficulties in meeting short-term cash needs, particularly in
relation to vendor commitments. Extreme volatility in energy prices
and a deteriorating global economy have created difficulties in the
capital markets and have hindered TXCO�s ability to raise debt
and/or equity capital. Faced with these constraints, and after
extensive efforts to improve the Company�s liquidity, TXCO and its
subsidiaries filed their chapter 11 petitions.
The Company has filed a variety of first day motions with the
Court that, with Court approval, will allow it to continue to
conduct business without interruption. These motions are primarily
designed to obtain post bankruptcy financing and minimize the
impact on the Company�s operations, customers and employees. During
the reorganization process, suppliers should expect to be paid for
post-petition purchases of goods and services in the ordinary
course of business.
TXCO filed a motion with the Bankruptcy Court for an interim
order seeking approval of an anticipated debtor-in-possession
financing pursuant to a Summary of Terms and Conditions with
potential DIP lenders (the �DIP Term Sheet�). The DIP Term Sheet
contemplates that certain lenders would provide to TXCO
debtor-in-possession financing (the �DIP Facility�) composed of a
multiple draw term loan facility in an aggregate principal amount
of up to $32,000,000 (the �Total Commitment�), with an initial
$12,500,000 anticipated to be made available on an interim basis
subject to the fulfillment by TXCO of specified conditions
precedent, including entry by the Bankruptcy Court of an interim
order. The anticipated commitment of the DIP lenders to provide DIP
loans under the DIP Facility is subject to a number of conditions,
including entry by the Bankruptcy Court of an interim order and
completion of loan documentation satisfactory in form and substance
to the DIP lenders. There can be no assurance that TXCO will be
able to obtain financing on the terms proposed in the DIP Term
Sheet or at all.
About TXCO Resources
TXCO Resources is an independent oil and gas enterprise with
interests in the Maverick Basin, the onshore Gulf Coast region and
the Marfa Basin of Texas, and the Midcontinent region of western
Oklahoma. TXCO�s business strategy is to acquire undeveloped
mineral interests and internally developing a multi-year drilling
inventory through the use of advanced technologies, such as 3-D
seismic and horizontal drilling. It accounts for its oil and gas
operations under the successful efforts method of accounting and
trades its common stock on Nasdaq�s Global Select Market under the
symbol �TXCO.� Additional information, including recent regulatory
filings and investor presentations, is available at the Company�s
Web site, www.txco.com.
Forward-Looking
Statements
This press release contains forward-looking statements within
the meaning of Section�27A of the Securities Act of 1933, as
amended, and Section�21E of the Securities Exchange Act of 1934, as
amended. In particular, statements by TXCO and its subsidiaries
(the �Company�) regarding future events and developments and the
Company�s future performance, including statements regarding
proceedings relating to the Company�s petitions for relief under
chapter 11 of Title 11 of the United States Code and the Company�s
operations and funding during the chapter 11 process, as well as
other statements of management�s intentions, hopes, beliefs,
expectations, representations, projections, estimations, plans or
predictions of the future, are forwarding-looking statements and
are made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995.
Forward-looking statements in some cases can be identified by
their being preceded by, followed by or containing words such as
�estimate,� �plan,� �project,� �forecast,� �intend,� �expect,�
�anticipate,� �believe,� �seek,� �target� and other similar
expressions. Forward-looking statements are based on assumptions
and assessments made by the Company�s management in light of their
experience and their perception of historical trends, current
conditions, expected future developments and other factors they
believe to be appropriate. Any forward-looking statements are not
guarantees of the Company�s future performance and are subject to
risks and uncertainties that could cause actual results,
developments and business decisions to differ materially from those
contemplated by any forward-looking statements. Except as required
by law, TXCO undertakes no obligation to revise or update any
forward-looking statements, or to make any other forward-looking
statements, whether as a result of new information, future events
or otherwise. Such statements include those relating to: forecasts
of the Company�s ability to successfully reorganize and emerge from
bankruptcy; estimated financial results; liquidity needs; the
Company�s ability to finance the Company�s working capital
requirements; expected oil and gas prices; production volumes; well
test results; reserve levels; number of drilling locations;
expected drilling plans, including the timing, category, number,
depth, cost and/or success of wells to be drilled; expected
geological formations; or the availability of specific services,
equipment or technologies.
Investors are cautioned that all forward-looking statements
involve risks and uncertainties including without limitation the
Company�s ability to continue as a going concern; the Company�s
ability to obtain debtor-in-possession (DIP) financing on an
interim or final basis; the Company�s ability to operate pursuant
to the terms and conditions of any DIP financing and any cash
collateral order entered by the United States Bankruptcy Court for
the Western District of Texas in connection with the Company�s
bankruptcy cases; the Company�s ability to obtain Court approval
with respect to motions in the chapter 11 cases prosecuted by the
Company from time to time; the Company�s ability to develop,
prosecute, confirm and consummate a plan of reorganization with
respect to the Company�s bankruptcy cases; risks associated with
third parties seeking and obtaining court approval to terminate or
shorten the exclusivity period that the Company has to propose and
confirm a plan of reorganization, for the appointment of a chapter
11 trustee or to convert the Company�s bankruptcy cases to cases
under chapter 7 of the U.S. Bankruptcy Code; the Company�s ability
to obtain and maintain normal terms with vendors and service
providers; the Company�s ability to maintain contracts that are
critical to its operations; the potential adverse impact of the
Company�s bankruptcy cases on the Company�s liquidity or results of
operations; the Company�s ability to fund and execute its business
plan; the Company�s ability to attract, motivate and retain key
executives and employees; the Company�s ability to attract and
retain customers; the Company�s ability to obtain capital to fund
the Company�s working capital or other needs; the adequacy of the
Company�s liquidity and ability to meet cash commitments, working
capital needs, lender and vendor obligations; general market
conditions; adverse capital and credit market conditions; the costs
and accidental risks inherent in exploring and developing new oil
and natural gas reserves; the price for which such reserves and
production can be sold; fluctuation in prices of oil and natural
gas; the uncertainties inherent in estimating quantities of proved
reserves and cash flows; competition; actions by third party
co-owners in properties in which the Company also owns an interest;
acquisitions of properties and businesses; operating hazards;
environmental concerns affecting the drilling of oil and natural
gas wells; impairment of oil and natural gas properties due to
depletion or other causes; and hedging decisions, including whether
or not to hedge. Similarly, these and other factors, including the
terms of any reorganization plan ultimately confirmed, can affect
the value of the Company�s various pre-petition liabilities and
TXCO�s common stock and preferred stock. No assurance can be given
as to what values, if any, will be ascribed in the chapter 11 cases
to each of these constituencies. Accordingly, the Company urges
that the appropriate caution be exercised with respect to existing
and future investments in any of these liabilities and/or
securities.
Txco Resources (MM) (NASDAQ:TXCO)
Historical Stock Chart
From Apr 2024 to May 2024
Txco Resources (MM) (NASDAQ:TXCO)
Historical Stock Chart
From May 2023 to May 2024