Oil Company Bankruptcies and Info

Unit filed their schedule and statement of affairs. Too lengthy to post here, so see earlier posts on how to access the docket sheet.

MDC has filed a 3rd motion to extend the time to file their Chapter 11 plan from July 31 to October 31.

Seems like they are struggling getting support for their reorganization plan.

2020-07-17 - MDC - 3rd Motion Extending Deadline to File Plan.pdf (349.4 KB)

On all of these Chapter 11s where you are being paid and the company is promising to continue to pay, you should still ask yourself the following questions (just a guideline - many chapter 11s also allow certain royalty owner claims to survive the bankruptcy and not be discharged, but you have to delve into the details of the bankruptcy to figure this out):

  1. Was the company current on my royalty payments?
  2. Have I checked to make sure no additional wells were drilled they had not started paying me on yet?
  3. Was the company in breach of any provisions in my lease?
  4. Had the company taken any improper deductions from my royalty payments?
  5. Were there any payments in suspense, or wells I was not being paid on, due to title issues?
  6. Were there any other overdue payments under the lease, e.g. extension options?
  7. Did the company owe me a release, partial release or depth severance release on an expired lease?
  8. Did the lease involve old wells not producing in paying quantities where I may have been able to get the lease terminated?
  9. If I also owned the surface, was I owed any surface damage payments?
  10. Were there any easement payments that I was owed, where they had already built the improvement and we were working out the easement agreement?
  11. Was I owed any seismic permit payments?
  12. Did I have any claims that the operator should have drilled offset wells?
  13. Had a horizontal well been drilled where they were using a production allocation formula I did not think was correct?
  14. Was I owed any lease bonuses that had not been paid or were going to come due during the bankruptcy?
  15. Will I be owed any payments from a regular source of income, i.e. water sales?
  16. Is there anything I am wanting to do that the lease may prohibit or restrict without their consent, i.e. selling minerals where the lease gives them a right of first refusal?
  17. Is there any unmitigated work they were supposed to do, i.e. plugging wells, cleaning up pits, etc.?
  18. Is the company current on my SWD payments, and are those covered in the interim orders that are being entered?
  19. Was this bankruptcy filed in Delaware, where they may try to argue I am not a secured creditor?

Remember, a No answer to all of these does not mean the court notices can go in File 13. Approach a bankruptcy as a potential threat to any claim you have, or know you are going to have soon, against an operator. It can also be an easier, cheaper, and opportune time to get them resolved, as the whole focus of a bankruptcy court, as compared to a state court lawsuit, is to get claims resolved and to try to get the company back on its feet or sold.

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Want to know how bad it was at MDC before they filed? There were 1400 mechanics and mineral liens filed against them. See the motion below to try to consolidate all these adversary suits into one manged case.

Between this and the additional extension on filing a reorganization plan, not sure how bright it looks for MDC to get reorganized.

That’s a lot of vendors to stiff

Rosehill Resources filed Chapter 11 in Houston. Appears to be a pre-packaged Chapter 11.

Rosehill_Resources_Inc._Press_Release[1].pdf (152.0 KB) Disclosure_Statement[1].pdf (5.1 MB) Order_Granting_Motion_to_pay_Mineral_Owners[1].pdf (449.1 KB) pter 11. Here is the press release and some of the filings.

In the Chesapeake bankruptcy, a committee of royalty owners has been appointed.

https://dm.epiq11.com/case/chy/dockets/488?debtorId=9877

A major issue has come up in the Unit bankruptcy. Chieftain Royalty had obtained a class certification order for Oklahoma royalty owners in February, and has filed a proof of claim and a motion to ask the bankruptcy court to recognize this class and the proof of claim for the class. Unit is trying to get the class claims discharged.

Chieftain motion.pdf (1.1 MB)

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Thank you for this info.

Echo Energy filed for chapter 11 bankruptcy on 3/24/2020, Houston, TX. Echo Energy Partners I, LLC

Looks as if there was a sale of assets recently, so not sure what this means for royalty owners. We never received paperwork from them, as we are in the process of transferring ownership of our well with them.

Taxpayers will lose over $200 million due to Chapter 11 filing by failed solar power project in Nevada with government guarantees.

Hmmm - I don’t recall any of these oil and gas operators that have filed having a big government handout they are walking away from.

WSJ link - requires a subscription

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Denbury Resources Inc. is Filing for Chapter 11 to try and eliminate $2.1 Billion of Bond Debt

Here is Denbury’s order authorizing them to continue to pay mineral and working interest owners. Look at paragraph 6 of the order.

2020-07-31 Docket 63 - Order Royalty Payments.pdf (639.0 KB)

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Gavilan’s auction to sell their assets has been pushed to September 11.

Quite a few objections filed to Ultra’s reorganization plan.

Chesapeake interim financing order was signed July 31. It is 100 pages long.

Maybe I overlooked the thread, but could anyone point me to information on the Ch. 11 bankruptcy information for Axis Exploration? They are in with Extraction O&G, Inc; 7N; 8 North; Extraction Finance Corp; Mountaintop Minerals; Northwest Corridor Holdings; Table Mountain Resources; XOG Services; and XTR Midstream, principal place of business 370 17th Street, Suite 5300, Denver, Colorado 80202.

I was sent a bunch of paperwork for filing a claim, but I read online that often royalty interest owners are paid without filing claim. I am trying to find out if I actually need to file a claim for the gas & oil royalties sold after September 2019 or if I will automatically be paid through the bankruptcy proceedings.

The leased area is in Arapahoe County, Colorado, T4S R64W Sections 21 & 22, Houlihan 04-64-22A 22-01.

Thank you for any help. Dai

Someone on the forum posted this link for national bankruptcy monitoring. You might try looking there: https://www.haynesboone.com/-/media/Files/Energy_Bankruptcy_Reports/Oil_Patch_Bankruptcy_Monitor

Lillis Energy filed Chapter 11 in Houston after their restructuring deal fell through. Looks to be headed toward a liquidating Chapter 11. I will not post further on this company because of its small size.

Motion to Approve Bidding Procedures, Etc…pdf (1.2 MB)

Chaparral Energy filed a pre-packaged Chapter 11 in Delaware. They already filed their plan and disclosure statement.

The Sable asset auction is now scheduled for October 10.

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