Samson Resources Corp. told the Delaware bankruptcy court Tuesday that its auction raised nearly $660 million for its estate by selling a series of assets and mineral rights, many to the stalking horse bidders, but 37 rounds of bidding yielded a competitive winner for mineral rights mostly in Texas.
In a series of notices, Samson said that while it didn’t receive any overbids for its four asset packages located primarily in Oklahoma, North Dakota and New Mexico, bidding for the oil and gas firm’s so-called Permian mineral assets, which occupy a swath of West Texas and spill over into the Land of Enchantment, sparked a competitive auction that pushed the price up to $51.7 million.
After 37 bids, Stone Hill Minerals Holdings LLC was deemed the winner at the auction in the Chicago offices of Kirkland & Ellis LLP, with a joint offer of $51.5 million from Saxet Minerals LLC and Royalty Interests Partnership LP standing as the backup bid, according to court records.
“Four qualified bidders participated in the auction, which comprised 37 rounds of overbids,” Samson said in court papers. “The debtors declared Stone Hill Minerals Holdings LLC as the successful bidder for the Permian minerals assets.”
The other asset packages that were on the block but went to the stalking horse bidders were Samson's so-called Williston assets in North Dakota, and some of Montana, to Resource Energy Can-Am LLC for $75 million; its San Juan assets in New Mexico, and parts of Colorado, to the Southern Ute Indian Tribe, doing business as Red Willow Production Co., for $116 million; its west Anadarko assets to Tecolote Holdings LLC for $131 million; its central Anadarko assets to Fairway Resources Partners III LLC for $132 million; and its east Anadarko assets to Rebellion Energy LLC for $152 million, according to court records.
The Andarko assets are mostly in Oklahoma, with some areas in Kansas and Texas.
The sales need court approval, and U.S. Bankruptcy Judge Christopher S. Sontchi is scheduled to consider them all during a hearing in Delaware on Oct. 17.
That date was also when the official committee of unsecured creditors was slated to press its bid for derivative standing to challenge first- and second-lien creditors in the case, with the sights mostly set on an $8 billion leveraged buyout in 2011 and $3 billion in emergency second-lien financing Samson obtained just nine months later.
The committee has argued that its challenges could amount to $1 billion worth of debt connected to Samson’s estate, and the situation has grown more precarious since Judge Sontchi denied the debtor an extension of its exclusive right to file a Chapter 11 plan last month, opening the door for unsecured creditors to field their own.
Unsecured creditors have threatened to do just that, but hearings on the matters have since been postponed to an as-yet undetermined date, according to court records.
Samson, which operates or has royalty or working interests in about 8,700 oil and gas wells, filed for Chapter 11 protection in September 2015 listing more than $4 billion in debt, and citing many of the same bearish forces in the energy commodity market that have sent many of its peers flocking into bankruptcy court.
The company entered Chapter 11 with a restructuring support agreement that fell apart last fall amid continuing volatility in the energy markets, and an updated strategy rests largely on a debt-for-equity swap with second-lien lenders and the money raised by asset sales.
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., case number 1:15-bk-11934, in the U.S. Bankruptcy Court for the District of Delaware.
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