Aurora Gas files for bankruptcy

Aurora Gas LLC entered bankruptcy protection earlier this year after three creditors petitioned a bankruptcy court, claiming nearly $400,000 in combined unpaid debt.

In a statement filed with the United States Bankruptcy Court for the District of Alaska, Aurora Gas President J. Edward Jones reported a loss of $923,238 for 2015. Jones blamed the loss on a combination of declining natural gas production and a workover project that cost more than $1 million but failed to yield an expected uptick in production.

The local independent filed for bankruptcy protection under chapter 11 after Aurora Well Service LLC, Shirleyville Enterprises LLC and Tank-A-Lot Inc. filed an involuntary petition with the court in early May. According to the court, as of June 1, Aurora owes its 20 largest creditors nearly $1.5 million. In addition to the three petitioners, Aurora owes more than $100,000 to four other Alaska-based companies: Tyonek Contractors LLC, Tyonek Native Corp., Alaska Eco Resources LLC and AIMM Technologies Inc.

Aurora is one of the oldest independent oil and gas companies operating in Alaska.

The utility Aurora Power Resources Inc. created Aurora Gas in 1999 as an exploration and production arm, at a time when major consolidations throughout the oil industry were creating opportunities for smaller companies to pursue overlooked fields in Alaska. In August 2015, Rieck Oil Inc. acquired Aurora Gas from a consortium of previous owners.

Aurora currently operates five producing natural gas fields on the west side of Cook Inlet - Nicolai Creek, Lone Creek, Moquawkie, Albert Kaloa and Three Mile Creek.

Earlier this year, in a presentation to Alaska lawmakers, Aurora proposed a major development program for the remainder of 2016 and 2017, including two extension wells at west Moquawkie, an extension well and a step-out well at Nicolai Creek. The presentation also included potential projects contingent on the results of a package of 3-D seismic over the region that the company was looking to acquire from Apache Corp.

- ERIC LIDJI