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Three days before a state deadline, Storm Cat Energy, a bankrupt coal bed methane company that owed Wyoming $10.8 million, received approval to unload hundreds of wells on another company for nearly nothing, the Casper (Wyo.) Star-Tribune reported today. Storm Cat went under after the price of natural gas plummeted. Large companies, seeing the writing on the wall for the market, stepped out of the coal bed methane game years ago. Smaller companies bought those wells and pits but were often financially weak, falling into bankruptcy as the price continued to decline. Since 2014, 4,681 wells have been left idle on state and private land. Using a tax on operators, Wyoming's Oil and Gas Conservation Commission has fewer than half of them.Wyoming could have seized Storm Cat's insufficient reclamation bonds. Its 2,432 idle wells would have become orphans, adding to a long list of such wells the state and federal agencies have to clean up.

Tulsa, Oklahoma-based Samson Resources II LLC has agreed to sell its assets in East Texas and North Louisiana to an affiliate of Houston-based Rockcliff Energy II LLC for $525 million, the Houston Business Journal reported yesterday. The deal, which is expected to close on Sept. 29, comes after Samson emerged from bankruptcy as the successor to Samson Resources Corp. on March 1. The company eliminated $4 billion of debt through the chapter 11 process. In May, Samson announced it tapped investment banks Jefferies LLC and Houlihan Lokey Capital Inc. to sell all of the company’s East Texas and North Louisiana assets, which consist of about 210,000 net acres that produce about 90 million cubic feet per day. Read more. 

Get a better understanding of what happens when an oil, gas or other natural resources company restructures. Order your copy of ABI's revised and expanded When Gushers Go Dry: The Essentials of Oil & Gas Bankruptcy, Second Edition. 

Energy businesses that are trying to exit bankruptcy are finding a savior in some of their own creditors, which have been scooping up newly issued stock from the companies at hefty discounts, Reuters reported today. More than a dozen so-called rights offerings have raised billions of dollars over the past 18 months, according to data compiled by Reuters, to help revitalize these energy companies in return for large fees and juicy investment returns. But those benefits have not been equally shared among all the creditors providing the cash. The deals are coming under increasing scrutiny by creditors and shareholders in some bankrupt companies over how to divvy the returns, and whether these companies should be looking for a different strategy altogether. Breitburn Energy Partners is a case in point. An official committee representing shareholders hopes to derail a $1 billion rights offering that the company is considering, which would be the biggest such offering in years. In these deals, a company sells newly issued stock — typically discounted around 20 percent to its estimated value — to its creditors, which are usually hedge funds that hold its bonds. The technique has proven lucrative for a select group of hedge funds such as Elliott Management that specialize in distressed investing. From January 2016 to June 2017, 17 of 56 bankrupt publicly-traded energy companies have sought to refinance through a rights offering, according to a Reuters review of court and regulatory filings. By comparison, in 2015, six of the 41 bankrupt publicly traded energy companies did so. Read more. 

Get a better understanding of what happens when an oil, gas or other natural resources company goes bankrupt. Order your copy of ABI's revised and expanded When Gushers Go Dry: The Essentials of Oil & Gas Bankruptcy, Second Edition.