Gulf of Mexico (GOM) operator ATP Oil & Gas Corp., which filed for bankruptcy protection last August, has asked the court for permission to auction some of its shallow-water wells.
The Houston-based company was required by lenders to begin looking for asset buyers, according to court documents filed on Wednesday (In re ATP Oil & Gas Corp., Debtor, U.S. Bankruptcy Court, Southern District of Texas, No. 12-36187). The auction was required by lenders following the Chapter 11 filing (see Daily GPI, Aug. 20, 2012).
At the time of its petition for bankruptcy, ATP management said the “primary reason for the reorganization began with the Macondo well blowout in April 2010 and the imposition beginning in May 2010 of the moratoria on drilling and related activities” in the GOM.
The auction rules “are designed to encourage all entities to put their best bids forward and to maximize the value of the shelf assets,” ATP’s filing stated. In December equity holders asked the court to appoint an examiner to determine the value of ATP’s reserves.
Seven parties to date have signed confidentiality agreements with ATP to obtain information about the properties to post bids. Eighteen leases are for sale, including seven that are producing oil and gas, ATP said. ATP also is required to spend close to $34 million to plug and abandon some properties.
If U.S. Bankruptcy Judge Marvin Isgur were to approve the auction rules, initial letters of interest would be due by Feb. 5 to Jefferies & Co., the company’s investment bank. Binding bids would be due Feb. 19; if more than one offer is made for a property, an auction would be held Feb. 26 in Houston.
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