Order Entered Approving Sale to Halcon Energy

Updating a previous post, a hearing on the sale of substantially all of the Debtor's assets was held before the Court on August 16, 2012.  After the hearing, the Court entered an Order approving the sale of the Debtor's assets to Halcon Energy.  The parties are attempting to work together to resolve any issues that remain so that the closing of the transaction may occur in a timely manner.  

Please feel free to contact us at ozgascommittee@quinnfirm.com to obtain a copy of the Sale Order, and/or any other pleadings as filed.

Bar Date to File Proof of Claim About to Expire

Updating an earlier post, the Bankruptcy Court on March 30, 2012, entered a Notice setting the deadline for all creditors to file a proof of claim in the Bankruptcy Case for August 9, 2012.  All claims must be filed by that date in order to receive potential distributions thereon.

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.

Debtor Files Motions to Extend Time to Assume/Reject Leases and File Plan of Reorganization

On May 8, 2012, the Debtor filed a Motion to Extend Time to Assume or Reject Unexpired Leases of Nonresidential Real Property pursuant to 11 U.S.C. § 365(d)(4)(B)(i).  The Debtor filed this Motion for the purposes of allowing more time to attempt to sell those leaseholds of deep oil and gas rights that it currently holds.  A hearing on this Motion has been scheduled for June 21, 2012 at 10:00a.m., in the Erie Bankruptcy Court, 17 South Park Row, Erie, PA, with responses due June 14, 2012.

In addition, the Debtor also filed a Motion to Extend Exclusive Period to File a Plan and Disclosure Statement pursuant to 11 U.S.C. § 1121(d).  To the extent that the Debtor is attempting to sell its leasehold rights, in addition to other assets, for the purposes of formulating and funding a plan to pay its creditors, it now seeks more time during which to accomplish that before it must submit a plan to the Bankruptcy Court.  This Motion has also been scheduled for hearing on June 21, 2012 at 10:00a.m., with responses due June 14, 2012.

First Meeting of Creditors Scheduled; Bar Date to File Proofs of Claims Set

On March 30, 2012, the Bankruptcy Court entered a Notice scheduling the Debtor’s First Meeting of Creditors for Friday, May 11, 2012, at 11 a.m. in Bankruptcy Court Conference Room B110, U.S. Courthouse, 17 South Park Row, Erie.  The Notice also set the deadline for all creditors to file a proof of claim in the Bankruptcy Case for August 9, 2012.

Orders Entered Approving Debtor's Use of Cash Collateral and Broker; Debtor Files Completed Petition, Schedules, & Monthly Operating Reports

On or about March 22, 2012, the Debtor's Final Order Authorizing Use of Cash Collateral was entered by the Court.  Essentially the Debtor will be permitted to use cash in accordance with the approved budget to continue operations unless or until the bank or another interested party files a motion to terminate that authority.  In addition, on or about March 27, 2012, a modified Order was entered approving the Debtor's Broker, Joseph W. Haas and Reserve Energy Exploration Company, for the purposes of assisting the Debtor with the marketing and sale of certain of its oil and gas leaseholds.

Also on or about March 26, 2012, the Debtor filed its completed bankruptcy petition and schedules, which include information related to all of the Debtor's unsecured creditors, in addition to a listing of all of the Debtor's other debts, assets, liabilities, contracts, and certain other financial transactions over the last year or so.  Finally, the Debtor has also filed its first two (2) monthly operating reports ("MORs"), which generally contain information related to the Debtor's gross receipts and disbursements, including copies of the Debtor's bank statements and payroll.  The Debtor will continue to file MORs on a monthly basis.  Please feel free to contact us at ozgascommittee@quinnfirm.com to obtain a copy of the Debtor’s completed petition and schedules, MORs, and/or any other pleadings as filed.