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Samson Proposes Auction with $320M in Stalking Horse Bids

Bankrupt oil and gas exploration firm Samson Resources Corp. submitted proposed bid procedures in Delaware for some of its assets Tuesday that include stalking horse bids totaling $320 million for its business in three mineral-rich basins, and contemplating a sale hearing on Oct. 17.
In the motion, Samson said that it has been negotiating for several months with proposed bidders through a robust marketing process, and has finalized stalking horse agreements with three entities for assets in oil and gas deposits centered in North Dakota, Montana, Wyoming, Oklahoma and Texas. The company is considering holding on to other assets as the core for a potential reorganization effort.
"[T]he debtors believe that there may be a combination of sales that will result in sale proceeds sufficient to significantly pay down the first-lien lenders in cash while retaining sufficient assets around which the debtors can reorganize and deliver value to second-lien lenders and potentially unsecured creditors," the bid procedures motion said.
Samson has identified Tecolote Holdings LLC as the bidder for the West Anadarko Basin in Oklahoma, with a floor bid of $131 million; Resource Energy Can-Am LLC as the bidder for the Williston assets in North Dakota and Montana, with an offer of $75 million; and the Southern Ute Indian Tribe as the bidder for the San Juan assets in New Mexico and Colorado, with a bid of $115 million.
The company will accept bids for seven days after the motion is granted, with a hearing on the bid procedures envisioned for sometime in the next two weeks. After its marketing process that included talks with more than 500 prospective buyers, Samson said it believes the stalking horse bids may enliven a potential auction set for two weeks after the procedures gain approval from the bankruptcy court. A final sale hearing has been requested for Oct. 17.
Discussions are continuing with potential bidders for the company's remaining assets, but the motion stresses that no decisions have been made relating to those assets.
Samson has interests in more than 8,700 operating wells in several oil and gas deposits throughout the country. It sought court protection in September 2015 after ceasing its drilling operations and failing to negotiate a restructuring with its noteholders. It listed more than $4 billion in debt, including a $942 million first-lien revolving credit facility, $1 billion in second-lien term notes and more than $2 billion in senior unsecured notes.
The company had come to court with a restructuring support agreement with its second-lien lenders who pledged to backstop a $450 million new rights offering, but the continued depression in oil and gas commodity prices sank that prospect, and Samson resumed its marketing efforts.
Since February, the company said it has reached out to more than 550 parties and received indications of interest from 57 bidders. By the end of August, Samson had narrowed the field to the three stalking horse bidders.
Representatives for Samson could not be reached for comment late Wednesday.
Samson is represented by James Sprayregen, Paul Basta, Edward Sassower, Ross Kwasteniet, Brad Weiland, Yosef Riemer and Joshua Sussberg of Kirkland & Ellis LLP and Morton Branzburg of Klehr Harrison Harvey Branzburg LLP.
The case is In re: Samson Resources Corp. et al., case number 1:15-bk-11934, in the U.S. Bankruptcy Court for the District of Delaware.