Augustus Energy Resources LLC

3/16/18

Augustus Energy Resources is a privately-owned natural gas E&P company based in Billings, Montana; its primary assets are operating and non-operating working interests in approximately 1575 natural gas wells in eastern Colorado, the aggregation of which arises out of various acquisitions from Berry Petroleum Company and Rosetta Resources. 

The company filed for bankruptcy because the collapse in the market price of natural gas left it in a position where it couldn't (i) devote the capital necessary to maintain and grow its business, (ii) service its balance sheet and (iii) get access to credit. Indeed, the falling natural gas price led to multiple redeterminations of the borrowing base in the company's Wells Fargo-provided senior secured credit facility. Moreover, the company became the subject of a class action lawsuit accusing it of improperly charging royalty owners of certain post-production processing and transportation costs. This complicated an attempted out-of-court sale process of the company.

The company has filed for bankruptcy, therefore, to pursue a sale to a proposed stalking horse bidder, OWN Resources Inc. 

• Jurisdiction: D. of Delaware 
• Capital Structure: $14.4mm debt (Wells Fargo Bank NA)    
• Company Professionals:
  • Legal: Davis Graham & Stubbs LLP (Christopher Richardson, Thomas Bell, Kyler Burgi) & (local) Sullivan Hazeltine Allinson LLC (William Sullivan, William Hazeltine)
  • Investment Banker: TenOaks Energy Advisors LLC
  • Claims Agent: JND Corporate Restructuring (*click on company name above for free docket access)
• Other Parties in Interest:
  • Sponsor: Kayne Anderson Capital Advisors LP 
• Wells Fargo Bank NA
  • Legal: Vinson & Elkins LLP (William Wallander, Matthew Pyeatt) & (local) Womble Bond Dickinson (US) LLP (Ericka Johnson, Morgan Patterson)
• Stalking Horse Bidder: OWN Resources Inc.
  • Legal: Husch Blackwell LLP (Lynn Butler)