As crude oil prices hang low, about $43 per barrel Monday, some North Dakota operators are trying to divest interests in the Bakken.
Two debt-heavy operators in the state, Tulsa, Okla.-based Samson Resources and Denver-based American Eagle Energy, filed for Chapter 11 bankruptcy, planning to sell off Bakken assets to pay back what they owe.
Samson, with production acres in the Three Forks and Middle Bakken plays, has not yet succeeded in selling off acreage, spokesman Brian Maddox said.
“We have not currently entered into agreements to divest other larger packages, including our Bakken, Wamsutter, San Juan and non-core Mid-Con assets, because we perceived the value offered was less than the value of retaining those properties when economic factors and the impact to our credit position were considered,” the company said in first-quarter 2015 filings with the U.S. Securities and Exchange Commission.
"Even if we are successful at reducing our costs and increasing our liquidity through asset sales, we do not expect to have sufficient liquidity to satisfy our debt service obligations, meet other financial obligations and comply with restrictive covenants contained in our various credit facilities.”
The company is the most recent operator in the state to declare bankruptcy, filing in mid-September in hopes of clearing more than $3.25 billion in debt.
As part of the company’s restructuring agreement, second lien lenders own all of the equity of the reorganized company in exchange for providing at least $450 million of new capital to increase liquidity.
“The steps we are taking will allow our company to maximize future opportunities and compete more effectively with significantly less debt on our balance sheet,” Randy Limbacher, CEO of Samson Resources, said in a statement. “We fully expect to operate our business as usual throughout this process and to emerge as a financially stronger company.”
According to 2012 reports, Samson had 400,000 acres in the Bakken. Later that year, it would sell 116,000 acres, primarily in Divide and Williams counties, to Continental Resources for $650 million. No other sale of assets has been reported by the company since then.
And no substantial plans have been announced as to the fate of what does remain, Maddox said.
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“We are planning on a Dec. 3 emergence date,” he said of bankruptcy proceedings.
Between June and late September, 10 oil and gas companies have filed for bankruptcy — 19 have filed in the past year since mid-October.
American Eagle Energy, which buys and develops oil wells in the Bakken, was the fourth, filing in mid-May.
American Eagle missed an interest payment on its debt. It listed assets of $222 million and liabilities of $215 million at the time of filing.
American Eagle held 54,262 acres in the Bakken in late 2014. In early 2015, it sold 1,185 leasehold acres in Divide County for $9.5 million.
American Eagle could not be reached for comment.
Outside of those companies filing for bankruptcy, Occidental Petroleum Corp. agreed to sell all of its North Dakota shale oil acreage and assets to private equity fund Lime Rock Resources for $500 million, according to the Reuters news agency. The sale includes 300,000 acres and a recently built, 21,000-square-foot regional office building in Dickinson.
Locally based MDU Resources Corp. is also trying to sell off its oil and gas exploration subsidiary, Fidelity Exploration and Production Co., but has not announced a deal to date.
MDU is scheduled to report its most recent quarterly results next week.