HOUSTON (1) – Blackstone Group’s (BX.N) Gavilan Resources LLC filed for Chapter 11 bankruptcy late on Friday, citing this 12 months’s oil worth collapse and a bitter authorized battle with a companion.

Fashioned following the $2.three billion acquisition of Texas shale oil properties in 2017, Gavilan listed secured debt of greater than $550 million in its submitting in U.S. Bankruptcy Court docket in Houston.

It plans to promote its property, in keeping with the submitting. It has employed funding banker Lazard Freres & Co and named attorneys Weil, Gotshal & Manges and Vinson & Elkins as bankruptcy advisers.

Oil costs this 12 months are off greater than 60%, damage by a collapse in demand for fuels attributable to coronavirus-related lockdowns and a market glut spurred by shale and a battle for market share among the many world’s prime producers.

Gavilan’s bankruptcy comes amid an “more and more unworkable relationship” with companion Sanchez Vitality Corp, the submitting stated. The pair acquired 155,000 acres in Texas’ Eagle Ford Shale oil area from Anadarko Petroleum.

Blackstone declined to remark.

Gavilan and Sanchez have been embroiled in a lawsuit over the event and possession of the properties. That lawsuit is about to renew Could 22.

Sanchez additionally filed for Chapter 11 final 12 months blaming low costs and the greater than $2 billion in debt it took on to assist it develop by means of acquisitions. Its restructuring plan has been confirmed however is just not but efficient, the court docket submitting stated.

This 12 months’s oil-price collapse has led debt-laden shale producers together with Occidental Petroleum and Chesapeake Vitality to hunt to restructure their loans. In April, Whiting Petroleum turned the most important shale bankruptcy for the reason that coronavirus pandemic lower demand.

Reporting by Gary McWilliams; Modifying by Daniel Wallis and Leslie Adler