Cox Oil asks court to appoint mediator to help close sale to W&T

By Sarah Lizee

Olympia, Wash., Sept. 27 – Cox Oil Offshore, LLC is seeking appointment of a mediator to help close the sale of some of its assets, according to an emergency motion filed Tuesday with the U.S. Bankruptcy Court for the Southern District of Texas.

As background, the company filed bankruptcy to pursue one or more asset sales to maximize the value of the debtors’ estates.

An auction was held on Aug. 16, and the debtors announced their successful and backup bidders for six different asset packages for a total aggregate consideration of $133.7 million.

The asset packages to be sold to W&T Offshore, Inc. for $88.5 million represent nearly 70% of the cash that would go to the debtors’ estate.

The company said that over the last five weeks, the debtors have engaged in significant efforts to negotiate and finalize purchase and sale agreements with the applicable successful bidders, most notably with W&T.

On Tuesday, the debtors filed the executed W&T sale agreement and are seeking to schedule a sale hearing for no later than Oct. 13.

However, the company said the debtors now need the help of the court with respect to closing the W&T sale because several post-auction disputes have arisen with some of the debtors’ contract counterparties.

The company said the debtors are facing significant liquidity constraints, having borrowed the full amount of their $75 million new-money debtor-in-possession loans, and do not have a backup bidder for the W&T sale.

Obtaining access to the liquidity provided by the W&T sale will provide the debtors with a critical liquidity injection that the debtors are unable to obtain from any other party on any practical timeline, the company said.

“Put simply, the failure to close the W&T sale will result in a disastrous outcome for the debtors’ creditors,” the company said in the motion.

The Dallas-based drilling company filed bankruptcy on May 14 under Chapter 11 case number 23-90324.

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