Alta Mesa Resources Inc. oil and gas gathering subsidiary Kingfisher Midstream LLC filed for Chapter 11 bankruptcy, just a couple of months after its parent company did, The Wall Street Journal reported Jan. 13.
Kingfisher's efforts to sell its assets garnered four letters of intent from potential buyers, The Wall Street Journal reported, but none were sufficient to cover the company's $224 million debt.
John Regan, the midstream subsidiary's CFO, said in a bankruptcy filing cited by The Wall Street Journal that Kingfisher Midstream decided to sell the assets in bankruptcy. Kingfisher and embattled pure-play STACK operator Alta Mesa are pursuing a joint bankruptcy sale, the report said.
Regan said in the filing that Kingfisher was not able to meet its debt obligations after Alta Mesa Resources' weak production affected the midstream unit's earnings.
A joint venture of Bayou City Energy Management LLC and Mach Resources LLC earlier this month proposed an opening stalking horse bid to buy Alta Mesa Resources and Kingfisher Midstream for $310 million. A bankruptcy judge rejected the bid, citing discomfort with a provision for a 3% termination fee if the companies accept a different offer, the publication reported.
A group of Alta Mesa Resources' bondholders also reportedly made a $310 million bid for the two companies, which will be up for auction Jan. 15, according to the article.