PetroQuest Energy Inc., a Louisiana-based oil and gas exploration company, has filed for bankruptcy in Delaware with $115.5 million in debt ($104.5 million secured, $11 million unsecured). This marks their second bankruptcy filing, having previously emerged from Chapter 11 in 2019. The company, which was founded in 1998 and focuses on oil and natural gas properties in Texas and Louisiana, plans to sell its east Texas operations while in Chapter 11.
Multiple factors have contributed to PetroQuest's financial troubles, including mounting operating and debt costs, legal fees from a lost lawsuit against Patriot Natural Gas LLC, declining oil and gas prices, and well decommissioning expenses. The company has been entangled in significant legal battles, notably losing a lawsuit to Patriot Natural Gas LLC over a failed $115 million asset sale, which required them to return an $11.5 million escrow deposit and cover additional expenses. They have also been involved in ongoing litigation with Sanare Energy Partners since 2019 regarding contract transfer disputes.
The company's current financial situation is precarious, with only $1.5 million in cash, most of which is reserved for royalty payments, leaving just $550,000 for operations. To navigate through bankruptcy and facilitate the sale of their east Texas assets, PetroQuest has secured a $14.2 million debtor-in-possession loan from secured lenders. With several potential buyers already identified, the company plans to request Chapter 11 auction procedures approval within two weeks, aiming to restructure and sell their assets in an orderly manner.
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