An alternative offer from Kachemak Exploration LLC has been accepted by all parties.

Kachemak is a Delaware corporation recently formed by Fort Worth Texas oil man John Upton's GFR Holdings and Melody Capital Partners L.P., represented by Melody executive Blake Yaralian.

It further appears that all lawsuits and objections from all parties have been settled.

An Amended Notice of Auction Results filed Feb. 18 by Furie said the debtors have entered an Acquisition by Foreclosure Agreement, dated Feb. 17, between and among the debtors, as sellers, and Kachemak Exploration, as the acquirer.

The notice said the debtors intend to seek entry of an Approval Order, approving the debtors' entry into the acquisition agreement. Furie is also seeking for the acquirer to be approved to replace HEX as the successful bidder.

The debtors are moving forward with the sale hearing currently scheduled for Feb. 20 at 2 p.m. (prevailing Eastern Time), the notice said.

The acquirer has made a deposit into escrow of $200,000 as part of the acquisition agreement.

In connection with the acquisition, the acquirer agrees to pay the debtors an amount equal to $2 million, to be used solely to satisfy allowed fee claims and allowed administrative claims.

The acquirer would waive the aggregate principal amount of loans made by Melody debtor in possession lenders under the DIP Credit Agreement.

Contemporaneous with the execution of the acquisition agreement, the debtors will declare a default with respect to the HEX bid and seek appropriate relief to retain any deposit amounts received by debtors in connection with the HEX bid.

- STEVE SUTHERLIN

See full story in Feb. 23 issue, available online Friday, Feb. 21, at www.PetroleumNews.com

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