Plans to sell the majority of its assets to a group of secured lenders led by Credit Suisse in a transaction supervised by a Texas bankruptcy court.
ATP Oil & Gas Corp. (Nasdaq: ATPG) plans to sell the majority of its assets to a group of secured lenders led by Credit Suisse Group AG (NYSE: CS) for $691 million in a transaction supervised by a Texas bankruptcy court.
Credit Suisse was the successful bidder for the assets, held in a federal bankruptcy hearing earlier this week. ATP filed for Chapter 11 bankruptcy in August. About $45 million of the price will be used to pay senior creditors.
Court papers show ATP has agreed to auction its assets, including leasehold and other working interests in 23 deepwater areas off the shores of Texas and Louisiana and its related production facilities and equipment.
In August, ATP obtained a commitment for $617.6 million of debtor-in-possession financing from members of its existing senior lender group. This included $250 million of additional funds that will be refinanced into the facility.
On April 19, 2010, ATP priced $1.5-billion of second-lien notes the day before the April 20 explosion and blow-out of the Macondo well that led to the shutdown of operations in the Gulf of Mexico.
“The delay on operations and the increasingly uncertain regulatory environment adversely affected ATP’s operations and planned development that was necessary to service its additional debt,” said ATP chief financial officer Al Reese in the filing. “Despite statements that the moratoria had been lifted at various points in time, the government did not issue new deepwater drilling permits until Feb. 28, 2011, thus effectively extending the moratorium. As a result, ATP was unable, despite access to funds, to drill and bring on-line six new wells during 2010 and 2011.”
At the time, ATP held leasehold and other interests in the Gulf of Mexico in 38 offshore blocks and 49 wells, including 23 subsea wells. ATP operated about 90% of its total wells in the Gulf of Mexico, and served as operator on all of its deepwater wells. Approximately two-thirds of ATP’s wells are located in the Gulf of Mexico.
The Houston-based oil and gas company was largely focused on dry gas and took on debt in an effort to diversify its revenue base into more gas and liquids. The federal government put a moratorium on new exploration in the Gulf following the Macondo oil spill, frustrating the company’s efforts to diversify its revenue base.
Judge Marvin Isgur is scheduled to hold a hearing on the auction on May 9.