A U.S. bankruptcy court on April 8 approved a $220 million sale of failed Oklahoma shale firm Alta Mesa Resources Inc. after a lengthy delay and renegotiation prompted by the oil-price crash.
Creditors agreed to sell the company to a joint venture between Bayou City Energy Management LLC and Mach Resources LLC, a company founded by U.S. shale pioneer Tom Ward. The price is nearly a third less than creditors had negotiated earlier this year.
Buyers set closing for April 9, a move that an attorney for Alta Mesa creditors slammed as "gamesmanship" for reducing the deal's value by more than $5 million. The price adjusts by $1.75 million for every $1 per barrel change from a $23 per barrel baseline price. The reference price is set two days before closing.
"We are disappointed and frustrated by what we see as gamesmanship by the buyer," attorney Caroline Reckler told the court. The delay came at the end of a day in which the oil reference price "took a tumble," she said.
Bayou City and Mach Resources did not immediately reply to requests for comment on the court approval or the timing of the closing.
Thursday could be a significant day for global oil prices with a scheduled meeting of OPEC to consider coordinated production curbs. Oil prices in March fell to the lowest in nearly two decades, souring an original agreement.
After bankruptcy court Judge Marvin Isgur asked if the two sides would accept an April 10 closing to remove questions about pricing, an attorney for Bayou City opposed the idea and it was dropped.
"I'd resist a temptation to play with the price of oil," said attorney Gregory Pesce. "We're ready to close tomorrow morning."
The court also delayed action on motions seeking to require Bayou City and Mach to either stick to their original $320 million purchase price or face breach of contract claims. Those motions will be dismissed if the closing concludes on April 9, the court said.
Recommended Reading
ConocoPhillips: Permian Basin a ‘Growth Engine’ for Lower 48
2024-05-15 - ConocoPhillips views the Permian Basin as a “growth engine” within its Lower 48 portfolio, the company’s Midland Basin Vice President Nick McKenna said during Hart Energy’s SUPER DUG event in Fort Worth.
Williams Cos. Blasts Energy Transfer’s FERC Filing
2024-05-15 - In response to Energy Transfer, Williams says the rival’s action is “lawfare” to delay the company’s Louisiana Energy Gateway project.
KeyState, CNX Bring Hydrogen Facility to Pittsburgh Airport
2024-05-15 - KeyState Energy and CNX Resources said the facility can produce hydrogen solely, reaching up to 68,000 metric tons annually, or sustainable aviation fuel solely, reaching up to 70 million gallons per year.
Adkins: Attacks on Fossil Fuels, Overregulation Poised to Backfire
2024-05-15 - Raymond James’ J. Marshall Adkins tells Hart Energy’s Super DUG conference attendees demonizing oil and gas, strenuous regulations and continued inflation are bound to have unexpected consequences for E&P opponents.
Chesapeake Stockpiles DUCs as Doubts Creep in Over Southwestern Deal
2024-05-02 - Chesapeake Energy is stockpiling DUCs until demand returns through growth from LNG exports, power generation and industrial activity.