Barrow Shaver Resources: Trade Creditors Force Texas Wildcatter Into Involuntary Bankruptcy

On July 23, 2024, trade creditors owed $8.5 million in aggregate filed an involuntary chapter 7 petition against Barrow Shaver Resources Company LLC rather than waiting for the company to file voluntarily. Within weeks, the Tyler, Texas-based exploration and production company consented to relief and converted the case to chapter 11. The case includes five separate adversary proceedings, mineral interest disputes, contested lien claims that resulted in $2.5 million in withheld revenue, and allegations that insiders failed to pay their share of operating costs. After 16 months of litigation, substantially all assets were sold to TexOil Investments, LLC via emergency 363 sale in November 2025—though post-sale administration and adversary proceedings continue.

Founded in 1989 by Thomas D. Barrow and Scott O. Shaver, the company built its business on prospect generation and lease acquisition across the East Texas and West Texas Basins. Industry observers described the founders as "the last of a dying breed of oilmen willing to risk everything on unproven acreage." For 35 years, the partnership operated 76 producing wells, drilled 26 wells in 2023 alone, and generated approximately $14 million in annual revenue. In July 2024, oilfield service providers filed an involuntary chapter 7 petition, and the company later consented to relief and converted to chapter 11.

Debtor(s)	Barrow Shaver Resources Company LLC
Headquarters	Tyler, Texas
Industry	Oil & Gas Exploration and Production
Founded	1989
Founders	Thomas D. Barrow, Scott O. Shaver
Managing Partner	Scott O. Shaver
Petition Date	July 23, 2024 (involuntary chapter 7)
Conversion to Chapter 11	August 19, 2024
Court	U.S. Bankruptcy Court, Southern District of Texas (Houston Division)
Case Number	24-33353
Judge	Hon. Alfredo R. Perez
Revenue	~$14 million
Employees	7
Producing Wells	76
Daily Production (est.)	1,562 BBLs oil / 1,562 MCF gas
Trade Creditor Claims	$8,454,981.01
Lien Claims Withheld	$2,506,506.81
Purchaser	TexOil Investments, LLC
Sale Order	November 19, 2025

Company Background: Barrow Shaver Resources

The Barrow-Shaver partnership. Barrow Shaver Resources Company LLC traces its origins to mid-1989, when Thomas D. Barrow and Scott O. Shaver formed a partnership focused on oil and gas exploration in Texas. Both founders brought experience in prospect assembly and marketing throughout the East and West Texas basins. Scott O. Shaver served as Managing Partner while Thomas Barrow remained an active partner in operations. The company operated continuously for 36 years before the involuntary petition.

The company's business model centered on prospect generation, producing properties acquisition, lease acquisition, and well development. Barrow Shaver operated with approximately seven employees managing 76 producing wells.

Geographic focus and production profile. Barrow Shaver concentrated its operations in the East Texas Basin, a region containing the Cotton Valley Group and Travis Peak Formations. According to USGS assessments, these formations hold an estimated mean undiscovered conventional resource of 29.81 million barrels of oil and 605.03 billion cubic feet of natural gas.

The company ranked 97th nationally for wells drilled in 2023, with 26 new wells spudded that year. Six oilfield service companies later filed the involuntary petition.

Operational structure. Court filings reveal that Barrow Shaver organized its operations into two categories: Hidden Rock Operations, covering oil and gas activities in the Hidden Rock Field in and around Cass County, Texas; and Legacy Operations, encompassing all other company operations not associated with the Hidden Rock Field. This distinction appears in bankruptcy filings.

Path to Bankruptcy: Involuntary Petition

Involuntary Chapter 7 Petition

On July 23, 2024, six oilfield service companies filed an involuntary chapter 7 petition against Barrow Shaver Resources in the Southern District of Texas. Trade creditors with accumulated unpaid invoices filed the petition.

The petitioning creditors held combined claims of $8,454,981.01—trade debt accumulated from drilling, completion, and production services. The claims totaled about 60% of the approximately $14 million in annual revenue reported in company data.

Filing under chapter 7 rather than chapter 11 meant a chapter 7 trustee would take control of assets and conduct an orderly wind-down, potentially through piecemeal asset sales.

Plains Marketing Interpleader

Two days before the debtor's conversion motion, Plains Marketing, L.P. filed a Complaint for Interpleader in Adversary Proceeding 24-03167 on August 17, 2024. Plains, which purchased and marketed the company's oil production, faced competing claims to revenue otherwise owed to Barrow Shaver.

Force Pressure Control, LLC and Axis Energy Services, LLC—two of the petitioning creditors—had served lien notices on Plains asserting secured claims totaling $2,506,506.81. Under Texas law, these oilfield vendors could assert mineral liens against production proceeds, creating uncertainty about whether Plains should pay Barrow Shaver or withhold funds pending lien resolution.

Plains withheld the $2.5 million and filed an interpleader complaint asking the bankruptcy court to determine who was entitled to the funds. With $2.5 million in production revenue frozen, the company lost access to those funds.

Conversion to Chapter 11

On August 19, 2024—27 days after the involuntary petition—Barrow Shaver Resources consented to an order for relief and moved to convert the case from chapter 7 to chapter 11. The company filed an Emergency Motion for Entry of an Order Clarifying the Status of the Voluntary Petition, effectively conceding that the petitioning creditors had established grounds for involuntary relief while seeking to restructure rather than liquidate.

The court granted the conversion and accorded the case complex case treatment, assigning it to Judge Alfredo R. Perez on the Southern District of Texas's complex chapter 11 panel. Judge Perez serves alongside Judge Christopher Lopez on a two-judge panel presiding over large cases in the Houston division.

With conversion complete, Barrow Shaver filed first-day motions and brought in restructuring professionals to manage operations. James A. Katchadurian of CR3 Partners, LLC assumed the role of Chief Restructuring Officer on August 19, 2024, taking operational control of the company.

Causes of Financial Distress

Court filings and the First Day Declaration identify several factors that contributed to Barrow Shaver's financial distress:

Trade creditor accumulation. Barrow Shaver owed nearly $8.5 million to oilfield service providers who had drilled, completed, and maintained wells on the company's behalf. Six of those vendors filed the involuntary petition.

Liquidity squeeze from withheld revenue. The Plains Marketing interpleader reduced available cash. With $2.5 million in production revenue withheld pending resolution of competing lien claims, Barrow Shaver lost access to those funds.

Title and ownership disputes. Court filings indicate that working interests and overriding royalty interests (ORRIs) conveyed in connection with the Hidden Rock Operations were potentially not properly documented or recorded. These issues created uncertainty about ownership interests.

Joint Interest Billing failures. Oil and gas operations frequently involve multiple working interest owners sharing costs through Joint Interest Billings (JIBs). The operator sends monthly JIBs to working interest partners, who pay their proportionate share of drilling and operating expenses. Court filings allege that certain insiders received ORRIs and/or failed to pay their Joint Interest Billings.

Mineral Interests and Lien Complexity

Oil and gas bankruptcies involve mineral interests, layered ownership structures, and state-specific lien statutes. The nature of mineral interests can create competing claims in case administration.

Types of Mineral Interests

The Barrow Shaver case involves all three types. Royalty owners receive a percentage of production without paying operating costs. ORRI holders—often landmen, geologists, or promoters who facilitated transactions—similarly receive production payments without cost obligations. Working interest owners bear the actual operating expenses, paying their proportionate share of drilling, completion, and production costs through JIBs.

When an operator like Barrow Shaver fails to pay service providers, those vendors look to the mineral interests for recovery. Disputes focus on which interests can be reached and the priority of claims.

Texas Mineral Lien Framework

Texas provides statutory protections for oilfield service providers through Chapter 56 of the Texas Property Code. This statute grants a statutory lien to secure payment for labor or services relating to mineral activities—defined broadly to include drilling, operating, completing, maintaining, or repairing oil, gas, or water wells.

The mineral lien statute contains a bankruptcy exception: unlike most liens, mineral liens can be filed post-petition without violating the automatic stay. This means vendors who provided services before bankruptcy can perfect their liens afterward, potentially elevating themselves from unsecured to secured status.

For Barrow Shaver, lien claims from Force Pressure Control, Axis Energy Services, and other service providers were part of the case. The $2.5 million withheld by Plains Marketing reflected two lien claimants.

Joint Interest Billing Disputes

The JIB disputes alleged in Barrow Shaver involve issues described in oil and gas partnerships.

Court filings allege that certain parties with insider relationships received ORRIs without contributing to costs and/or failed to pay their JIBs.

Joint Operating Agreements (JOAs) typically include remedies for JIB nonpayment, including reciprocal liens on the delinquent party's leasehold interests.

Contested Matters and Adversary Proceedings

The Barrow Shaver case includes five adversary proceedings—separate lawsuits within the bankruptcy case—covering ownership disputes, lien challenges, and partnership claims.

Mineral Interests Motion Litigation

The debtor's first contested matter arose on August 19, 2024—the day of conversion—when Barrow Shaver filed an Emergency Motion for Entry of an Order Authorizing Payment of Mineral Interests, seeking authority to continue paying royalty and ORRI holders during the case.

This motion generated objections from six creditor groups:

The objections reflected competing priorities. Lien claimants argued that mineral interest payments should be subordinated to their secured claims. Mineral interest holders asserted priority rights to production proceeds. The Shaver family trusts (SOS-LMC, LLC and Scott Shaver Trust No. 2) were among the objectors.

The court entered an interim order on August 22, 2024, establishing a temporary framework for mineral interest payments pending full resolution. The UCC later filed a reservation of rights.

Adversary Proceedings

Plains Interpleader (24-03167). Filed before conversion, the proceeding asked the court to determine who was entitled to the $2.5 million in withheld production revenue. Force Pressure Control and Axis Energy Services asserted lien claims, and Barrow Shaver claimed the funds as estate property.

Lien validity challenge (25-03797). Filed in October 2025 by Cactus Wellhead LLC, Force Pressure Control LLC, Genesis Frac Services LLC, and Reliance Well Service, Inc., this adversary seeks declaratory judgment on the validity and priority of oilfield liens.

Partnership claims (25-03618). An ad hoc group including 0078HT LLC, Briarwood Group, Ltd., Deep Pool Holdings, LLC, HL American Oil & Gas LLC, Middleton Oil Company, and other partnership claimants filed suit seeking declaratory judgment on their ownership interests.

Individual mineral owners (25-03440). Raymond Kasino and LaWanda Turner filed suit seeking declaratory judgment and injunctive relief regarding their mineral interests—representing the individual landowners and royalty holders affected by the operator's bankruptcy.

363 Sale Process

Bidding Procedures and Marketing

On June 9, 2025, Barrow Shaver filed a Bidding Procedures Motion establishing the framework for a 363 sale of substantially all assets.

The investment banking engagement with Chaffe & Associates, Inc.—a New Orleans-based firm with oil and gas experience dating to 1982—supported the marketing process. Chaffe's restructuring practice focuses on distressed energy sector transactions.

In November 2025, the debtor filed an Emergency Sale Motion on November 12, 2025, seeking expedited approval of a sale to TexOil Investments, LLC.

Sale Structure

The assets were divided into two lots—Lot 1 and Lot 2. TexOil acquired both lots, taking substantially all of Barrow Shaver's oil and gas properties.

Section 363 sales allow assets to be sold "free and clear" of liens, claims, and encumbrances—with those interests attaching to sale proceeds instead. This mechanism enables buyers to acquire clean title while preserving creditors' rights to recover from the purchase price.

Sale Objections

The sale drew objections from multiple parties, several of which were filed as limited objections or reservations of rights:

These limited objections sought to preserve specific claims or ensure that certain interests transferred to the buyer subject to pre-existing rights. The Ad Hoc Group of Partnership Claimants includes working interest holders like Middleton Oil Company and others.

Princess Three Operating, LLC filed an objection and reservation of rights, building on the Adequate Protection Motion it had filed in January 2025. Princess Three asserted either secured or working interest claims related to the sale.

UCC Support

The Official Committee of Unsecured Creditors filed a Statement in Support of Sale on November 17, 2025. The UCC—represented by Faegre Drinker Biddle & Reath LLP—supported the sale.

The court entered the Sale Order on November 19, 2025, approving the transaction. On the same day, NETX Acquisitions, LLC and ETX Minerals, LLC resolved their stay relief motion through a stipulation with the debtor.

Professional Retentions

Debtor's Professionals

Chief Restructuring Officer. James A. Katchadurian of CR3 Partners assumed operational control on August 19, 2024. Katchadurian brought more than 25 years' experience directing bankruptcy proceedings and advising over 100 distressed organizations. His prior oil and gas experience included serving as CRO at Northstar Offshore Group, LLC—an offshore producer where he negotiated DIP financing that doubled production, then marketed assets for a 363 sale that repaid the DIP facility in full at above-market prices.

Lead counsel. Joseph E. Bain and Jones Walker LLP advise clients on insolvency issues specific to the energy industry, including recharacterization risks, executory contract treatment, and statutory liens. His experience includes representing an East Texas upstream company as debtor-in-possession.

Financial advisor. Riveron RTS, LLC (formerly incorporating Conway MacKenzie's restructuring practice) has managed hundreds of bankruptcy engagements. The firm provides 13-week cash flow modeling, operational analysis, and fiduciary services in chapter 11 cases.

UCC Professionals

Faegre Drinker's restructuring practice handles all constituents—debtors, lenders, committees, trade creditors—and has experience with oil and gas financing structures and their treatment in bankruptcy.

Professional Fee Applications

The volume of interim fee applications includes a fifth interim application for Riveron and fourth interim applications for counsel.

Key Timeline

Post-Sale Administration

The November 2025 sale to TexOil Investments, LLC resolved the asset disposition. On December 23, 2025, Barrow Shaver filed a Motion for Entry of an Order Authorizing and Approving Procedures for Settling Causes of Action—establishing a framework to resolve the adversary proceedings and contested claims that survived the sale.

With five adversary proceedings pending—covering interpleader funds, lien validity, partnership claims, and individual mineral owner rights—additional litigation remains before final distributions.

Professional fee applications continue, with fourth and fifth interim applications filed in late 2025. The claims administration process remains ongoing, with Stretto, Inc. managing notices and claims reconciliation.

Industry Context

West Texas Intermediate crude prices declined from approximately $85.35 per barrel in April 2024 to $69.95 by November 2024. PetroQuest Energy Inc., which operates oil and gas properties in Panola County (East Texas), filed for chapter 11 protection in November 2024.

The Railroad Commission of Texas is the state's oil and gas regulatory authority and publishes monthly production statistics.

For mineral interest holders affected by operator bankruptcies, Texas law provides certain protections. Royalty owners tracking the Barrow Shaver case on mineral rights forums expressed concerns about production continuity and payment of amounts owed for production already sold.

Frequently Asked Questions

Why was Barrow Shaver forced into bankruptcy?

Trade creditors owed $8.45 million filed an involuntary chapter 7 petition on July 23, 2024, rather than waiting for the company to file voluntarily. Six oilfield service companies—Axis Energy Services, DOC Energy Services, Cudd Pressure Control, Thru Tubing Solutions, Genesis Fluids, and Force Pressure Control—filed the petition after accumulating unpaid invoices.

What are the key case features?

The case includes five separate adversary proceedings involving mineral interest ownership, partnership disputes, and lien validity challenges.

What triggered the liquidity crisis?

Plains Marketing, L.P. withheld $2.5 million in production revenue after receiving lien notices from Force Pressure Control and Axis Energy Services. With $2.5 million in production revenue frozen, Barrow Shaver lost access to those funds.

What are the Hidden Rock Operations?

Hidden Rock Operations refers to the company's oil and gas activities in the Hidden Rock Field in Cass County, Texas—the primary focus of operations. Legacy Operations covers all other company activities outside the Hidden Rock Field.

Who bought the company's assets?

TexOil Investments, LLC acquired substantially all assets via emergency 363 sale. The court entered the Sale Order on November 19, 2025, approximately 16 months after the involuntary petition.

What is a JIB dispute?

Joint Interest Billing (JIB) is the mechanism operators use to bill working interest partners for their share of drilling and operating costs. Court filings allege that certain insiders failed to pay their JIBs and/or received overriding royalty interests without contributing to costs.

Why are there so many adversary proceedings?

Oil and gas operations involve complex ownership structures—working interests, royalty interests, overriding royalty interests. The five adversary proceedings reflect disputes over lien validity, partnership claims, interpleader of frozen funds, and individual mineral owner rights.

Who is the Chief Restructuring Officer?

James A. Katchadurian of CR3 Partners assumed operational control on August 19, 2024. He brings over 25 years of restructuring experience, including prior work as CRO at Northstar Offshore Group, where he oversaw a successful 363 sale of an offshore oil and gas producer.

What happens next?

The debtor filed a Settlement Procedures Motion in December 2025 to establish a framework for resolving partnership and ownership claims post-sale. Five adversary proceedings remain pending, and professional fee applications continue. Final distributions to creditors await resolution of contested claims.

How does Texas mineral lien law affect the case?

Texas Property Code Chapter 56 allows oilfield service providers to file mineral liens within six months of last service. These liens can be perfected post-petition without violating the automatic stay.

Who is the claims agent for Barrow Shaver Resources?

Kroll Restructuring Administration LLC serves as the claims and noticing agent. The firm maintains the official claims register and distributes case notifications to creditors and parties in interest.

For more bankruptcy news and restructuring analysis, visit the ElevenFlo blog.