The Federal Energy Regulatory Commission (FERC) is appealing a judge’s confirmation of Extraction Oil & Gas’s bankruptcy reorganization plan, but the company says that shouldn’t slow its exit from chapter 11 protection, Denver Business Journal reported. FERC, the agency that regulates interstate pipelines and their rates, filed a notice on Wednesday with the U.S. Bankruptcy Court for the District of Delaware that it is appealing a Dec. 23 ruling by Chief Judge Christopher Sontchi that approved the Denver oil company’s reorganization plan, which is anchored by a debt-for-equity exchange. The agency got involved in the bankruptcy case after Extraction sought, and ultimately won, court backing to break its existing pipeline and midstream contracts covering the transport of crude from Extraction wells in the Denver-Julesburg Basin north and east of the Denver metro area. Extraction Oil & Gas filed for chapter 11 protection on June 14 to reorganize and free itself from $1.7 billion in debt it couldn’t pay, either by negotiating a debt-for-equity swap with lenders, or by merging or being acquired by another oil and gas company. The reorganization plan calls for the company to issue new stock for a $200 million equity rights offering allowing major debtholders and lenders to convert what they’re owed into new shares in a reorganized Extraction. Another $50 million in equity rights will be offered to some creditors holding unsecured general claims against Extraction. That appears to include some pipeline and midstream companies that have renegotiated terms with Extraction in recent weeks. FERC had, in early December, argued to the bankruptcy court that an injunction covering the rejection of Extraction’s previous pipeline contracts was too broad and could be construed to limit FERC’s ability to weigh in on surviving FERC-regulated contract issues.
