Bid Procedures Approved, Sale Hearing Scheduled

After a series of supporting filings and hearings, the Bid Procedures Motion was approved by the Court on June 14, 2012.  As a result, the Sale Hearing will be held on August 16, 2012 at 10:00 a.m. in the Erie Bankruptcy Courtroom.  Any objections to the sale motion (which was subsequently filed on June 19, 2012) are due on or before August 9, 2012.

Potential bidders at the Sale Hearing must satisfy a number of requirements; but most importantly, they must either submit a $1,000,000 deposit 5 days or more prior to the Sale Hearing date or a $5,000,000 bid not less than 24 hours prior to the Sale Hearing.  In the Bid Procedures Motion and the purchase agreement attached thereto, the initial bid is $2,500/acre for deep rights in oil and gas leaseholds of up to 7,346.56 acres, for a total initial offer of $18,411,400.00.  This initial bid is, however, subject to downward adjustment if there are issues with any of the leases – adjusted down $2,500/acre for each lease that does not meet the requirements set forth in the purchase agreement.

In conjunction therewith, the Debtor also filed a schedule of its easements that may be assumed and assigned as to the interests subject to sale, and the cure amount with respect to any defaults on such contracts.  Any objections to the assumption and assignment of any contracts listed must be filed no later than August 3, 2012.

Debtor Files Bid Procedures Motion for Upcoming Sale

On May 25, 2012, the Debtor filed an Expedited Motion for an Order Approving (A) Bidding Procedures For the Sale of  the deep rights in certain oil and gas leases of Debtor, (B) Break-Up Fee Related to the Sale, (C) Assumption and Assignment Procedures for Surface Agreements, (D) Payment of Pre-Petition Royalties and (E) Form and Manner of Sale Notice ("Bid Procedures Motion"), which would govern the sale of certain leases in Warren and Forest Counties that the Debtor had been previously marketing.  While the sale motion has not yet been filed, a copy of the purchase agreement and the list of subject wells are attached to the Bid Procedures Motion.  A hearing was initially scheduled on this matter for June 6, but the hearing is now set for Wednesday, June 13, at 10:00 a.m. in the Erie Bankruptcy Courtroom, U. S. Courthouse, 17 South Park Row, Erie, PA 16501.  Judge Agresti has indicated that he has questions regarding the proposed procedures and will issue an order on the matters he would like addressed before the hearing. 

Please feel free to contact us at ozgascommittee@quinnfirm.com to obtain a copy of the Debtor’s Bid Procedures Motion, and/or any other pleadings as filed.