It appears Cass County operator Barrow Shaver is involved in a lawsuit and may well be forced to file Chapter 7. Any insight on the situation in Cass County Texas or advise on what mineral rights owners should do or expect to happen? I currently have two decent producing wells with Barrow Shaver that I’m receiving royalties on and a third that has been permitted and was to have been drilled by year end 2024. It appears the initial lawsuit papers against BS were filed 7/23/24 and looks like BS has 21 days to respond to the filing.
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Why are you assuming that the operator is headed to Chapter 7 bankruptcy, total liquidation, just because a lawsuit has been filed? A 21-day response time is normal and most defendants will file a general denial for the first round. The filing of a lawsuit does not mean that the claims are valid and that there are no defenses or cross-claims. Even if the operator owes the money and goes under, it is more likely to be a Chapter 11 bankruptcy, reorganization. Regardless, as a mineral owner, you will not have have a place in the lawsuit. Operations should continue as long as the wells are good.
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I was just repeating something i read online that I felt came from a reputable source, so I perhaps I over reacted. I’ll try to stress less about it. Thank you much for your perspective.
I’m also an investor with BSR and their oil wells. This has me very concerned as I just invested at the end of the year. What has been your average quarterly returns with them since investing with them? Do you believe quarterly distributions are on hold until this gets resolved? Their debt to service is $8.5M. For a company that has been around 35 years and doing tens of millions of dollars of oil producing, I’m shocked to hear they couldn’t service the smaller debt. How long have you been investing with them and what are your thoughts on this getting behind us quickly?
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I’m actually not an “investor” in the traditional sense. I own mineral rights on some wells they have successfully drilled. As of the July royalty payments, BS was current on those wells. August payments are not yet due. I have information (not from Barrow) that the situation might not be as bad as it may sound, so I wouldn’t panic. Things may very well work out ok. Could have better news in the next few weeks.
If your interested search all the liens filed against barrow shaver in Cass county deed records. Largest lien filed by a single company is around 17 mil. Most of the companies that filed liens did not join the creditors petition in the bankruptcy. At least not initially. In any case, 8.5 mil is just the tip of the iceberg. It should all come to light soon, but who knows. Will be interesting as a royalty owner.
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Do you know any additional details after today’s court hearing?
I knew there was to be a hearing this past week. Have not yet heard anything from the hearing.
Chapter 11 filed. Based on paperwork over 60 mil owed to the top 30 creditors. Only have to show top 30 in filing so more is owed. My question is how in the world did it go on for this long? I’m sure this caused many small mom and pop service companies to lock the doors. Eastonzdad, I would be interested to know what recourse, if any, you have in this. It sounds like you invested money with Barrow while tens of millions were owed by them.
where did you find this information online? It’s my understanding Chapter 7 was petitioned for them on behalf of creditors and the hearing was pushed to Wednesday of this week.
It was filed today. I would assume it is online, not sure if you have to pay to see.
I found the filing online. It’s filed through the Texas Southern District Bankruptcy Court. I’m having trouble finding it again, unfortunately. Will locate the filing and try to provide a link.
Here a link to the filing information. I guess you can try to copy and paste:
There is a chapter 11 now ongoing in Houston.
Right. I don’t see how B-S survives/reorganizes. Who would finance it?
Yes, all that you have stated here is true but, they voluntarily converted to Chapter 11. I too have two producing wells with them and I haven’t received a royalty check since 7/23/24. When I call them, they give me multiple answers on when the royalty checks will be mailed. My understanding is that they can only miss 60 days of royalty checks. The bankruptcy was filed in the Southern District which is in Houston, Texas. If you want to follow the case, Google Barrow Shaver Resources Bankruptcy Docket and it’s being followed by Kroll. There is a creditor’s meeting on 9/26/24 @ 10:00 and I’m going but, I live in Houston. Barrow Shaver owes 67 million to vendors and I can’t see how they can come out of this.
Are you an investor with them or did you lease to them?
It’s my understanding the bulk of that “67 million owed” is part of a leasing dispute between RCR and BS. The funds owed to suppliers and such is more like 8 million.
According to what Barrow Shaver filed with in the bankruptcy docket they owe 67 million to creditors. Around 40 million or so of that is documented in the Cass County Deed Records as creditors filed mineral liens against the wells/leases in which they performed services. None of this 67 million has anything to do with Rose City Resources. However, ongoing litigation does exist between Barrow Shaver and Rose City regarding lease disputes. An online search shows that a stay has been placed on the litigation during bankruptcy.
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It appears that other entities have filed claims with the court, beyond the original filing, per the court documents. If you are owed royalties, you may need to submit a claim with the court. You should consult with your attorney.
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