Breitburn Energy Partners LP received a $1.8 billion offer from Lime Rock Resources to acquire the partnership's assets amid ongoing bankruptcy reorganization proceedings, Reuters reported Feb. 3.
The "stalking horse" offer, or an initial bid on a company undergoing bankruptcy protection, exceeds a $1.6 billion valuation by Breitburn's investment bank, Reuters reported, citing court papers filed Feb. 2. Breitburn received the bid while it and its shareholders were waiting for a ruling from the bankruptcy court, the company divulged in a letter to U.S. Bankruptcy Judge Stuart Bernstein. "The Lime Rock Resources team seeks to bid aggressively and to remain patient and flexible in negotiations," the letter said.
During a bankruptcy confirmation hearing, Breitburn's shareholders argued that the company lowballed its valuation to appeal to creditors, the report said. Under the reorganization plan, Breitburn's assets would be split into two companies, one of which would be controlled by creditors following a debt-for-equity swap. The other would be created through a $775 million rights offering.
According to the shareholders' committee, Breitburn would be worth $3.8 billion as oil prices had risen since it filed for bankruptcy in 2016.
The bankruptcy court called for a hearing Feb. 13 to submit the Lime Rock bid as evidence, the report said.
Breitburn is a Los Angeles-based oil and gas partnership with holdings in U.S. plays including the Permian Basin of Texas and New Mexico.
