Alta Mesa Resources Inc.’s oil and gas pipeline and storage subsidiary Kingfisher Midstream LLC filed for chapter 11 on Monday morning, joining its bankrupt parent, with the plan of pursuing a joint bankruptcy sale, the Wall Street Journal reported. Kingfisher, which transports and stores oil and natural gas for drillers in Oklahoma’s Anadarko basin, had spent the past four months marketing its assets for a potential sale independent of its parent, receiving four initial letters of intent from interested bidders, according to a document filed by Kingfisher’s attorneys to the U.S. Bankruptcy Court in Houston. However, as the proposed purchase prices weren’t enough to cover Kingfisher’s $224 million debt load, the company decided that the auction would have to take place in bankruptcy to deal with existing liens and claims on the business’s assets, Kingfisher’s Chief Financial Officer John Regan said in a declaration filed with the bankruptcy court. Also, most of the bidders wanted a deal for the company to be paired with Alta Mesa, for which Kingfisher already provides oil- and gas-gathering services. Alta Mesa and Kingfisher had lined up a $310 million joint stalking-horse bid from BCE-Mach III LLC, a venture between oil and gas producer Mach Resources LLC and private-equity firm Bayou City Energy Management.
