Alta Mesa disclosure statement approved; plan hearing set for May 27

By Caroline Salls

Pittsburgh, April 23 – Alta Mesa Resources Inc. obtained conditional approval of the disclosure statement for its plan of liquidation, according to an order filed Wednesday with the U.S. Bankruptcy Court for the Southern District of Texas.

A combined hearing on confirmation of the plan and final approval of the disclosure statement is scheduled for May 27.

Earlier this month, 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 company said the terms of the modified agreements with BCE-Mach III, which was the intended buyer under the original sale agreements that failed to close, are “overall better than any of the debtors’ other alternatives, taking into consideration all relevant factors, including economics and timing of closing.”

The purchase price under the revised agreements will be reduced to $220 million from $320 million, subject to adjustments based on the settlement price as of closing for light sweet crude oil prompt month futures contract reported by the New York Mercantile Exchange for May, 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 plan of liquidation, 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.

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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