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Approach Resources Inc. – Designates Alpine Energy Acquisitions (Controlled by a Sam Zell and Tom Barrack JV) as Stalking Horse ($192.5mn Cash Bid); Aims for March 4th Sale Hearing


February 3, 2020 – Further to the requirements of a January 9th bidding procedures order [Docket No. 184], the Debtors have notified the Court of its intention to designate Alpine Energy Acquisitions ($192.5mn bid) as a stalking horse bidder (“the Stalking Horse”) in respect of section 363 auction/sale process [Docket No. 243]. An executed copy of the asset purchase agreement with Alpine Energy (the “Stalking Horse APA”) is attached as Exhibit A to the notice. 

The Stalking Horse is an acquisition vehicle formed by Alpine Energy, which was itself formed as a joint venture partnership in September 2019 between Sam Zell’s Equity Group Investments (“EGI”) and Tom Barrack's (he of Trump confidante fame) Colony Capital, Inc. (NYSE: CLNY or “Colony”). Alpine’s first investment was a $500.0mn DrillCo financing with California Resources Corporation (NYSE: CRC), the largest oil & gas exploration and production company in California. At that time Alpine Energy Chairman Craig Perry stated "“We are aggressively pursuing opportunities in the upstream oil & gas industry and look forward to speaking with operators in need of capital solutions.” 

Perry, who graduated summa cum laude from Princeton notes in his bio that he has an "Uber Rider Rating of 4.96." An interesting piece of alternative data…and pretty funny.

Key Terms of the Stalking Horse APA

Purchase Price: The aggregate consideration for the assets will be (i) cash of $192.5mn and (ii) the assumption of "Assumed Obligations," with adjustments as specified in Section 3.1(b) and Section 3.2 of the agreement.

Bid Protections: A break-up fee of $5,250,000 and an expense reimbursement amount of $250k (the “Expense Reimbursement Amount” and together with the Break-Up Fee, the “Bid Protections”).

There is also a minimum bid increment of $250k.

Credit Bidding

The bidding procedures order states: “In conjunction with any Transaction…the Prepetition Agent and the DIP Agent may, as determined by the Agent, credit bid any portion and up to the entire amount of the Prepetition Claim (as defined in the Financing Order) and/or the DIP Obligations (as defined in the Financing Order), as applicable, on any individual Asset, portion of the Assets, or all Assets, in each case constituting the Prepetition Collateral (as defined in the Financing Order) or the Collateral (as defined in the DIP Order)…”

Key Dates:

  • Stalking Horse Objection Deadline: February 10, 2020
  • Bid Deadline: February 14, 2020
  • Deadline to Designate Initial Highest Bid: February 17, 2020
  • Auction: February 26, 2020
  • Objection Deadline: March 2, 2020
  • Sale Hearing: March 4, 2020

About Alpine Capital

According to their website: "Alpine Energy Capital is an Independent Oil and Gas Company. We manage upstream assets in the lower 48 and focus on providing direct access to oil and gas investment opportunities for our partners. The firm employs over 30 professionals with a broad range of experience."

According to the press release announcing the Alpine JV: "Alpine Energy Capital, an energy investment management platform backed by Equity Group Investments and Colony Capital, combines investment management expertise with a highly experienced technical and operating team to provide direct and unique investor access to oil and gas investment opportunities."

About the Debtors

The Debtors, a Delaware corporation headquartered in Fort Worth, Texas, are an independent exploration and production company focused on the acquisition and development of U.S. onshore oil and natural gas resources. Approach Oil & Gas Inc., a Delaware corporation (“AOG”), and Approach Operating, LLC (“Approach Operating”), Approach Delaware, LLC (“Approach Delaware”), Approach Services, LLC (“Approach Services”) and Approach Midstream Holdings LLC (“Approach Midstream”), each a Delaware limited liability company, are wholly-owned subsidiaries of Approach. Approach Resources I, LP (“Approach LP”) is a Texas limited partnership with Approach Operating holding a 1% general partnership interest and Approach Delaware holding a 99% limited partnership interest.

The Debtors engage in the exploration, development, production and acquisition of unconventional oil and gas reserves in the Midland Basin of the greater Permian Basin in West Texas, where the Debtors leased approximately 113,000 net acres as of the Petition Date. Approach is a holding company with no independent assets or operations. All of the Debtors’ oil and gas leases are held by AOG and Approach LP. All of the Debtors’ employees are employed by Approach Operating, and the Debtors’ assets are operated by Approach Operating. Approach Operating manages substantially all of the Debtors’ receipts and disbursements. Approach Midstream, Approach Delaware and Approach Services currently perform no material services, and hold no material assets.

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The post Approach Resources Inc. – Designates Alpine Energy Acquisitions (Controlled by a Sam Zell and Tom Barrack JV) as Stalking Horse ($192.5mn Cash Bid); Aims for March 4th Sale Hearing appeared first on Daily Bankrupt Company Updates | Bankrupt Company News.

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