Alta Mesa and Kingfisher debtors’ Chapter 11 plans effective June 8

By Caroline Salls

Pittsburgh, June 9 – Alta Mesa Resources Inc. and its Kingfisher Midstream, LLC debtors’ Chapter 11 plans took effect on Monday, according to notices filed with the U.S. Bankruptcy Court for the Southern District of Texas.

The plans were confirmed on May 27.

In April, Alta Mesa requested court approval for the Alta Mesa and Kingfisher Midstream Drilling debtors to enter into modified purchase and sale agreements with BCE-Mach III, LLC.

The purchase price under the revised agreements was reduced to $220 million from $320 million, subject to adjustments, with a maximum purchase price of $240 million and a minimum purchase price of $200 million.

In addition, Alta Mesa said the debtors will receive a 5% overriding royalty interest on existing wells, conditioned on the crude oil price exceeding $45 per barrel.

The term of the royalty interest will be the earlier of three years from closing or when the interest reaches $25 million.

Under the Alta Mesa debtors’ plan, holders of general unsecured claims and pre-bankruptcy senior notes claims will receive a share of $5 million in cash, $250,000 of which was paid to the senior noteholders at the April 9 sale closing.

Holders of pre-bankruptcy RBL claims will receive all of the Alta Mesa debtors’ other case and assets, except for causes of action to be contributed to a litigation trust.

Interests will be cancelled, and holders will receive no distribution.

Meanwhile, under the Kingfisher debtors’ plan, a portion of the proceeds from the sale of Kingfisher’s assets will be distributed to the Kingfisher lenders. The purpose of the plan is to distribute the remaining proceeds following closing of the sale and the liquidation of any remaining Kingfisher assets.

The Kingfisher debtors’ estates will be wound down in accordance with the plan. A plan administrator will be appointed to implement all plan provisions.

Priority claims will be paid in full in cash.

Other secured claims will be paid in full in cash or holders will receive the collateral securing the claims.

Holders of credit agreement claims will receive a share of cash available for distribution.

Holders of general unsecured claims will receive no distribution.

Intercompany interests will be canceled.

Alta Mesa is an onshore oil and gas company based in Houston. It filed for bankruptcy on Sept. 11, 2019. The Chapter 11 case number is 19-35133.

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