A bankruptcy court in New York has approved plans by Norse Energy Corp. USA to sell its assets, especially oil and gas leases for about 130,000 net acres in the state’s portion of the Marcellus and Utica shales.

In related news the company, a subsidiary of Norwegian Norse Energy Corp. ASA, announced Monday that Chris Steinhauser would step down as CFO in September.

On Monday, U.S. Bankruptcy Court for the Western District of New York Judge Carl Bucki granted Norse’s motion to approve the sale of its leases, which the company had submitted at a hearing on July 25.

According to court documents for the case (No. 12-13685-CLB), the deadline for prospective bids is 4 p.m. (EST) on Aug. 23. The court scheduled bid assessments for Aug. 30, followed by a sale hearing at 12 p.m. EST on Sept. 23. Oil & Gas Asset Clearinghouse LLC has been retained to conduct the sale.

“Obviously the question becomes: how are the assets valued at the time of the proposed sale?” Norse executive vice president Dennis Holbrook told NGI’s Shale Daily on Tuesday. “Hopefully, people will see the potential of New York that we see and will bid up the value to the point that hopefully a relatively small portion of what we have available will be necessary to meet our obligations of the bankruptcy.

“That’s what you hope for. Obviously, any [news] that’s encouraging at all coming out of New York would be immensely helpful in that regard.”

Norse filed for Chapter 11 bankruptcy protection in December after a judge ruled the cash-strapped company had to deposit $7.65 million into an escrow account for a legal dispute with a driller, Bradford Drilling Associates LP (see Shale Daily, Dec. 10, 2012). Bradford sued Norse in December 2011 over a halted joint venture drilling program. The case is expected to go to court in the second half of 2013.

Norse has been unable to do much with its assets in New York due to the ongoing moratorium on high-volume hydraulic fracturing (HVHF). The state Department of Environmental Conservation (DEC) is working to finalize its supplemental generic environmental impact statement on HVHF, but a pending health impact analysis allegedly has stalled the process (see Shale Daily, Sept. 24, 2012).

In fact, politics and Gov. Andrew Cuomo are holding up the decision, and there is speculation as to whether the governor, who was handed the moratorium question when he took office three years ago, will make a decision before the next election in November 2014 (see Shale Daily, May 29).

The moratorium prompted Norse to issue notices of force majeure and to extend the leases for 1,500-2,000 landowners in December 2010 (see Shale Daily, March 3, 2011; Jan. 18, 2011).

“Almost everything [for sale] is under force majeure,” Holbrook said. “We have a very small amount, not more than a couple thousand acres, that have a number of years left on the term. Those leases didn’t have our standard force majeure language, so we didn’t declare force majeure on them. But that’s about 1-2% of the total.

“Our force majeure clause indicates that for the period of time that the force majeure event occurs, that period of time is added on to the lease term. We’re now up to almost three years.”

Holbrook said about 22,000 of the 130,000 acres at stake would have expired, between 2013 and 2016, had the company not declared a force majeure. But he said about half of those 22,000 acres are also protected by lease language that extends the primary term while the company awaits DEC approval of permit applications. The company applied for a permit to drill an unconventional gas well targeting the Marcellus in July 2011 (see Shale Daily, Aug. 1, 2011).

“You get the period of time for the approval of that permit and a reasonable time thereafter to develop, which we would interpret as probably the time period allotted over the permit,” Holbrook said.

In addition to the 130,000 acres, Norse had certified 2C contingent resources of 951 million boe as of Dec. 31. Holbrook said the company also has about a half-dozen wells that could be put on production but are not near a pipeline. He said about 8,000 of the company’s acres are currently held by existing production.

In 2011, Norse began looking for joint venture partners and considered shifting its attention to opportunities in Pennsylvania (see Shale Daily, Oct. 31, 2011; Oct. 25, 2011). It also sold two natural gas pipeline subsidiaries to Appalachian Transportation and Marketing LLC for $20.7 million. The next year, Norse sold operated production in New York to EmKey Resources LLC for $37 million (see Shale Daily, March 19, 2012; May 25, 2011).

“We still believe New York has tremendous potential,” Holbrook said. “We’re looking for — and we believe the people that are looking to buy our assets are looking for — some indication that New York is ready to move the process forward.

“It seems like we’ve been so close for so long. Hopefully there’s not much more to get us to the finish line and get the process started.”

In a statement, Norse said Monday that Steinhauser was resigning “to pursue other interests” and that his resignation would take effect on Sept. 6. The company said CEO Mark Dice would assume the duties of CFO on an interim basis in addition to his responsibilities as CEO.