During the month of June 2015 Storm Cat Energy (Battalion) shut in all of the remaining producing coal bed wells located in the Powder River Basin (Wyoming) that they acquired from J. M. Huber and possibly others. Since then they have filed for Chapter 11 bankruptcy protection. The United States Bankruptcy Court for the District of Colorado mailed notice of the existence of a Stalking Horse Purchase Agreement. Someone will likely buy these "assets". What is the status of the various leases that have not received any royalty including shut-in royalty for over a year? Can the terms be renegotiated with the buyer?
Jerry
Gerald,
In my personal experience, a Stalking Horse Purchase Agreement indicates that the Court is likely moving towards liquidation of the Assets of Storm Cat. The Trustee will now try to get competitive bids based on the Stalking Horse bid. If unsuccessful, the Trustee and Judge will go in a different direction. If successful, a lot of legal maneuvering will take place and perhaps a new lessee will emerge. Don't hold your breath.
Check with the Trustee. I think you will learn that the lease is being held in place by the court and laws. However, after a reasonable amount of time, you may be able to break the lease or gain the shut in payments by petitioning the court. As a lessor, your must give the Trustee time to reorganize or liquidate.
I'm not sure if unpaid shut in payments put you in a certain creditor class but it is worth a letter to the Trustee.
Petitions are expensive so make certain there is a return worth the risk.
Gary L Hutchinson
Minerals Managment
Thank you. The deadline for receipt of all purchase bids is Nov 15. If Debtors receive qualified competing bids the debtors will conduct an auction on Nov 22. If all goes "well" Debtors will seek approval of the sale at a hearing scheduled on Nov 29 before Judge Thomas B. McNamara.