Private Equity | Financial Trouble | Capital Markets

Yuma Energy Files for Chapter 11 Bankruptcy; Plans To Liquidate

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Yuma Energy, together with its subsidiaries Yuma Exploration and Production Company, Inc., Davis Petroleum Corp.,  announced today that they 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.  During the first quarter of 2020, Yuma's cash position deteriorated, and its cash flow from operations is no longer sufficient to cover its operating costs.  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.

Resignation

Separately, effective on April 10, 2020, 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 with the effectiveness of Mr. Schnur's resignations, the Company engaged Ankura Consulting Group, LLC ("Ankura") as its financial advisor.  Mr. Schnur was recently hired by Ankura, and Mr. Schnur will oversee the operation of the Debtors during the bankruptcy process as he provides his services to the Company through Ankura.

Operating Area

The Company's activities have focused on inland and onshore properties, primarily located in central and southern Louisiana and southeastern Texas.