A US oil and gas producer has filed for bankruptcy protection in the wake of falling prices for natural gas.
GMX Resources based in Oklahoma filed for Chapter 11 bankruptcy protection on Monday. It has total liabilities of nearly 460 million dollars.
Natural gas prices have dropped sharply as more US companies rushed into shale gas extraction. Shale gas is a type of natural gas trapped in solid rock layers. The trend has pushed gas prices down to less than one-third of their peak levels.
Many companies are now shifting to shale oil production, believing it to be more profitable. But GMX Resources has apparently fallen behind the trend.
They are switching to oil production because gas simply does not pay.