ERG Resources, a Houston-based independent oil and gas with major operation in northern Santa Barbara County recently filed for Chapter 11 bankruptcy in Dallas.

The company plans to sell the business.

A Business Times previous report found that the company owed nearly $400 million on a loan with CLMG Corp., an agent holding lien on all the company’s assets. CLMG claimed the ERG was on the brink of collapse when it filed suit to get the loan paid back.

Kelly Plato, ERG’s chief financial officer previously told the Business Times that the company was still trying to negotiate with its lenders. The company has struggled recently as the price of oil has plunged nearly 50 percent, leaving the company over-leveraged and with little cash flow, he said.

Closely held ERG was formed in 1996. It has leases on 680 net acres in Liberty County, Texas.

Subsidiary ERG Operating Co. operates in the Cat Canyon field in Santa Barbara County, California, where it acquired leases on about 18,800 acres since 2010.

According to a report from Bloomberg, ERG said it doesn’t expect the sale to pay off its debt in full.

CLMG will fund the bankruptcy with a $17.5 million loan, including $5 million to be available on an interim basis. The lender is LNV Corp. of Las Vegas, according to court filings.

The bankruptcy filing listed assets and debt each exceeding $100 million.