Published: April 17, 2020 |

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Yuma Energy together with its subsidiaries, have filed voluntary Chapter 11 petitions for relief under the United States Bankruptcy Code in the U.S. Bankruptcy Court for the Northern District of Texas. The company plans to continue to operate its business in the normal course during the court-supervised bankruptcy process.

The debtors intend to use the Chapter 11 process to implement the orderly liquidation of their assets in an effort to maximize values and recoveries to stakeholders. The debtors intend to seek immediate court approval to conduct an auction for substantially all of their assets, which primarily consist of operating and non-operating interests in several properties in Louisiana, Texas, Wyoming, and Oklahoma. The auction is expected to occur within the first 90 days of the bankruptcy filings.

The debtors may negotiate to obtain a new debtor-in-possession (DIP) financing to provide working capital to support normal operations and the sale of assets during the Chapter 11 process.

Anthony C. Schnur resigned from his positions as interim chief executive officer, interim chief financial officer, and chief restructuring officer of the company. Shortly after Schnur’s resignations, the company engaged Ankura Consulting Group as its financial advisor. Schnur was recently hired by Ankura, and he will oversee the operation of the debtors during the bankruptcy process as he provides his services to the company through Ankura.

“In 2019 and early 2020, we took proactive steps to recapitalize our company’s financial structure under a credit agreement with our lender YE Investment and a restructuring and exchange agreement with Red Mountain Capital Partners and certain of its affiliates including YE,” said Anthony Schnur.

“Unfortunately, YE recently notified us that it was terminating the credit agreement due to the company’s failures to make timely interest payments and to comply with other covenants, and further, that it was also accelerating all payments due under the credit agreement so that all outstanding principal, accrued interest, fees and other obligations under the credit agreement became immediately due and payable. Simultaneous with the termination of the credit agreement, Red Mountain notified us that it was terminating the restructuring agreement,” added Schnur.

“Our revenues and cash position have eroded to the point of unsustainability primarily driven by the severe downturn in oil prices. After much consideration, the company’s board of directors came to the decision that the use of the Chapter 11 liquidation process was the best path forward to maximize values and recoveries,” said Schnur.

“Although I am stepping down from my executive positions at the company, I intend to actively oversee this restructuring process. Also, I want to express my sincere gratitude to the employees for their continued dedication and hard work during this time,” concluded Schnur.

About Yuma Energy
Yuma Energy, Inc., a Delaware corporation, is an independent Houston-based exploration and production company focused on acquiring, developing and exploring for conventional and unconventional oil and natural gas resources. Historically, the company’s activities have focused on inland and onshore properties, primarily located in central and southern Louisiana and southeastern Texas.

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