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Furie Chapter 11 bankruptcy case closed
Reorganization wrapped up; Kitchen Lights unit lease work completed as HEX takes over; agreement with ORRI owner Infinity filed Steve Sutherlin Petroleum News
The Chapter 11 bankruptcy case of Furie Operating Alaska LLC is officially closed, pursuant to a final decree and order signed July 1 by Judge Laurie Selber Silverstein and filed in the U.S. Bankruptcy Court for the District of Delaware.
The order also closed the Chapter 11 case of Corsair Oil & Gas LLC.
All remaining matters will be administered in the Chapter 11 case of the remaining debtor, Cornucopia Oil & Gas Company LLC. The caption in the remaining case is now modified to in re: Cornucopia Oil & Gas Company LLC, debtor, rather than Furie Operating Alaska LLC et al, debtors.
In the motion for entry of an order closing the lead case, attorneys for the debtors said the case closures would avoid imposing “significant costs on the debtors’ estates.”
The order came on the heels of success in meeting the effective date of Furie’s third amended joint plan of reorganization which saw Anchorage based HEX Cook Inlet LLC close the deal to acquire the assets and existing equity interests of the debtors. HEX took control on July 1 of the offshore Cook Inlet Kitchen Lights unit, a natural gas production platform, related pipelines, and an onshore gas treatment terminal. (See story in July 12 edition: New approach: HEX reviews Kitchen Lights reserves, aims to tap Sterling formation).
Furie filed notice June 30 that the effective date of the reorganization plan had occurred and the plan was substantially consummated on June 30, stating that “all conditions precedent to the effectiveness of the plan occurred or were waived in accordance with the plan’s provisions.”
State transfers leases The State of Alaska on June 29 approved oil and gas lease transfers related to the HEX acquisition of the KLU, with an effective date of July 1.
The Department of Natural Resources Division of Oil and Gas received applications on June 23 to transfer all of the interest in leases held by Cornucopia and Corsair to HEX, from Deutsche Oel & Gas AG, parent company of the debtors.
The division said HEX agreed to conditions, as set out in the “HEX Cook Inlet Dismantlement, Removal, and Restoration Financial Assurances Agreement,” which requires HEX to provide DNR with financial assurances and information to ensure that HEX is capable of satisfying its obligations under the leases.
The state also approved lease transfers required to implement the “RWIO consent letter,” which reflects a settlement with royalty and working interest owners - Giza Holdings LLC; Taylor Minerals LLC; Allen Lawrence Berry; the 2007 Allen Lawrence Berry Trust; and Danny Davis.
In separate approval letters, the division approved the transfer of a 3.93750% working interest ownership from A. Lawrence Berry; a 3.43750% working interest ownership from Danny S. Davis; and a 2.625% working interest ownership from Taylor Minerals, LLC to Furie Operating Alaska LLC.
Furie, the state noted in its approval of lease transfers to HEX, is 100% owned by Cornucopia.
Withholding on ORRI payments Also on July 1, Judge Selber Silverstein signed an order approving a stipulation of settlement dated June 10 between Furie and overriding royalty interest owner Infinity Limited, trading as Infinity Alaska Ltd, a corporation formed under the laws of Guernsey.
The stipulation said that on or about Dec. 10, 2019, the debtors began to withhold amounts otherwise payable to Infinity, subject to resolution of “certain federal withholding obligations arising under the Internal Revenue Code and applicable regulations.”
As of the execution date of the settlement, the suspended funds held by Furie were $648,029.74 in the aggregate, it said.
Upon entry of an order approving the stipulation, Furie agreed to remit all suspended funds in its possession to the Internal Revenue Service for the benefit of Infinity, as the taxpayer, and Brutus AG (f/k/a Deutsche Oel & Gas, AG) (“Brutus”), as the statutory withholding agent.
From and after the effective date, reorganized Furie is to make such withholdings from amounts otherwise payable to Infinity on account of its ORRI as Furie reasonably determines is required under applicable tax statutes and regulations until the total amount withheld by Furie inclusive of the suspended funds is equal to the sum of $1,561,491.37 plus applicable fees and penalties, and other withholding amounts that come due and payable.
The parties shall use commercially reasonable efforts to cause Brutus to file forms 1042 and 1042-S (or other similar filings) with the IRS relating to all amounts remitted to the IRS prior to the effective date, the stipulation said.
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