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Still chasing asset sale Pacific Energy substitutes New Alaska Energy as winning bidder for Cook Inlet properties Wesley Loy For Petroleum News
Pacific Energy Resources Ltd.’s proposed sale of some of its oil and gas assets in Alaska’s Cook Inlet continues to hang in limbo in U.S. Bankruptcy Court in Delaware.
Numerous lawyers representing the Long Beach, Calif., firm and other interested industry and government parties gathered for a hearing Aug. 4, but nothing definitive was decided.
Gerry Tywoniuk, Pacific Energy’s chief financial officer, told Petroleum News the matter has been continued until Sept. 1.
“The buyer of our Alaska assets really hasn’t been determined,” he said.
On July 20, Pacific Energy conducted an auction in New York City for a package of its Cook Inlet assets, and announced that the tandem of Ammadon Ltd. and Catherwood Ltd., both registered in the British Virgin Islands, had submitted the winning bid of $8.1 million.
New top bidder declared But on Aug. 3, lawyers for Pacific Energy filed an amended notice of auction results in the Delaware court, saying that “as a result of issues that have arisen” with Ammadon and Catherwood, a backup offer of $7 million from New Alaska Energy LLC would be the prevailing bid.
A bankruptcy judge has to approve any sale, and the State of Alaska and a number of other parties have filed various objections.
Despite the Aug. 3 notification, it’s far from settled who, in the end, will take over the Cook Inlet assets, Tywoniuk said. It could be New Alaska Energy, the two British Virgin Islands companies or someone else, he said.
A “private company” is backing the Ammadon and Catherwood entities, but Tywoniuk said he wasn’t at liberty to name the company.
According to Alaska Department of Commerce records, New Alaska Energy was organized as a limited liability company on April 1 of this year, initially taking the name Alaskan New Energy LLC.
The state records show that Bob Gross of Anchorage and Richard Stryken of Palmer each hold 50 percent of New Alaska Energy. The records list the company as a “crude petroleum and natural gas extraction” business with a principal office address in Palmer.
Assets for sale Pacific Energy filed for Chapter 11 bankruptcy reorganization on March 9, citing a steep drop in oil prices.
The company says it’s losing millions of dollars on its Alaska assets and must either sell or abandon them. Pacific Energy also has California oil and gas properties that it intends to liquidate.
The bundle of Cook Inlet assets that were auctioned on July 20 include those that Pacific Energy itself operates: the West McArthur River field, the West Foreland field, and the Redoubt Shoal field with its Osprey offshore platform and Kustatan onshore facility. The bundle also includes interests in the Three Mile Creek field, which Aurora Gas LLC operates; some exploration properties; and a 50 percent stake in Cook Inlet Pipe Line Co.
Pacific Energy also has interests in Chevron-operated production assets, chiefly the Trading Bay field. Pacific Energy wants to sell these holdings too.
A key challenge in working out a purchase and sale agreement with any buyer is financing, Tywoniuk said, and global market conditions are “very, very tough.”
More details According to Petroleum News sources, the bankruptcy judge early in the week of Aug. 3 gave New Alaska Energy a week to come up with solid financing to cover its bid and to prove it can operate the Pacific Energy properties.
Another firm formed early this year, Cook Inlet Energy LLC, reportedly was interested in the assets but didn’t submit a formal bid. Sources say some of the shareholders are people who have operated Pacific Energy assets in the past when Bill Stewart, Forcenergy or Forest Oil owned them. But state corporate records show only two shareholders: David M. Hall of Kenai and Walter J. Wilcox II of Anchorage.
Nan Thompson, of the state Division of Oil and Gas, said she understood Ammadon and Catherwood withdrew their bid after they “decided they did not want to do business in Alaska.”
Petroleum News Publisher and Executive Editor Kay Cashman contributed to this story.
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