ATP Oil & Gas Corp. asked the judge overseeing the company’s bankruptcy for permission to hold an auction for a group of shallow-water oil wells in the Gulf of Mexico.
The company was required to start looking for buyers last year by the lenders funding ATP’s bankruptcy, according to court documents filed yesterday in federal court in Houston. Under the bankruptcy loan terms, the company was required file proposed auction rules for the so-called shelf properties.
The rules “are designed to encourage all entities to put their best bids forward and to maximize the value of the shelf assets,” the company said.
ATP filed for bankruptcy Aug. 17, blaming its insolvency on the 2010 Deepwater Horizon oil rig explosion in the Gulf of Mexico and the drilling moratorium that followed. Last month, equity holders asked a judge to appoint an examiner to investigate the value of oil producer’s petroleum reserves.
Seven parties have signed confidentiality agreements with the company in order to get enough information about the shelf properties to potentially bid.
Of the 18 properties that may be sold, seven are pumping oil and gas. The company must spend about $34 million to plug and abandon some of the properties, according to court documents.
Should U.S. Bankruptcy Judge Marvin Isgur approve the auction rules, initial letters of interest will be due Feb. 5 to the company’s investment bank, Jefferies & Co. Binding bids will be due Feb. 19 and should more than one offer come in, an auction would be held Feb. 26 in Houston.
The company’s 11.875 percent bonds due in 2015 fell almost 4 percent to 8.5 cents on the dollar, according to Trace, the bond price reporting system of the Financial Industry Regulatory Authority.
The case is In re ATP Oil & Gas Corp., 12-36187, U.S. Bankruptcy Court, Southern District of Texas (Houston).
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