With crude oil prices dropping to their lowest since 2009, is it any surprise to see so many oil and gas assets changing hands as companies seek Chapter 11 bankruptcy protection? Dune Energy is one of the many companies striving to survive the current crude oil market lows, filing this past March. Other companies include: Sabine Oil & Gas Corp., American Eagle Energy Corp. Milagro Oil & Gas and BPZ Resources.
As reported by the Wall Street Journal, “The Houston-based, energy company filed for Chapter 11 protection in U.S. Bankruptcy Court in Austin, Texas, listing assets of $229.5 million and debts of $144.2 million. Senior lenders are owed $39 million, while second-lien lenders are owed nearly $68 million. As a condition of a $10 million bankruptcy loan, Dune’s senior lenders are requiring that the company put itself up for auction.”
Dune sought out potential merger partners without much success. They were only able to locate one interested party: Eos Petro. The deal didn’t sit well with everyone. One of Dune’s investors, Thomas Whatley, filed a lawsuit aimed at killing the deal because the price was too low. The lawsuit ultimately proved unnecessary as Eos was unable to secure the financing. The failed merger left Dune with few attractive options to pay off debts and investors.
The next plausible step in their Chapter 11 obligations, was to sell off assets. As reported by OilVoice, White Marlin Oil and Gas paid $19 million dollars for Dune Energy assets after a contentious auction with accusations flung at Chevron and Enervest Energy that their demands scared off potential higher bidders. The accusations remain unfounded.
The final sale to White Marlin included the following 11 fields: Abbeville North, Bayou Couba, Chocolate Bayou, Comite, Lake Boeuf SW, Leeville, Los Mogotes, Malo Domingo, Manchester SW, Manchester W, and Toro Grande. The purchase fits in nicely with White Marlin’s strategic plan to increase wealth in their Texas and Louisiana Gulf Coast offerings through acquisitions and drilling.