|
|
Enron Mail |
---------------------- Forwarded by Mark E Taylor/HOU/ECT on 10/04/99 03:44
PM --------------------------- rantonof@cwt.com on 10/04/99 09:20:31 AM To: Lisa Mellencamp/HOU/ECT@ECT, Mark E Taylor/HOU/ECT@ECT, Rod Nelson/HOU/ECT@ECT, Fred Lagrasta/HOU/ECT@ECT cc: Subject: Forcenergy Asset Sale FYI Below is a report on the Forcenergy bankruptcy case I received this morning. Forcenergy Seeks OK For Asset Sale, Bidding Procedures Forcenergy Inc. has asked the court to authorize the sale of seven oil and gas properties to Hilcorp Energy I L.P. as well as procedures designed to draw competing bids for the assets through an auction. The motion, filed Sept. 13 with the U.S. Bankruptcy Court in New Orleans, requests permission to sell five Louisiana and two Texas properties and related assets to Hilcorp, subject to better offers. Hilcorp has offered Forcenergy $6,086,000 in cash for the properties. Sierra Mineral Development L.C. indicated interest in purchasing the Texas and Louisiana properties in late 1998. In March, one month after signing a letter of interest with Sierra, Forcenergy filed for Chapter 11 relief. Hilcorp then agreed to finance Sierra?s purchase of the Forcenergy properties. Any purchase agreement will list only the names of Forcenergy and Hilcorp. The terms of the agreement include Hilcorp?s responsibility to "assume all liabilities related to the Property after the Effective Date, and all Plugging and Abandonment Obligations and Environmental Obligations, if any, regardless of when incurred," the filing reports. Forcenergy claims that this is a fortuitous time for the approval of the sale due to the current stable cash flow, the production of its onshore properties, and the potential for sustained growth in its offshore Gulf of Mexico drilling facilities. The oil and gas explorer and producer also requested the approval of overbid procedures, recognizing that new interest in Forcenergy?s properties may come after other interested parties review the purchase agreement. Any person submitting an overbid to counsel for the creditors? committee, Hilcorp, Forcenergy, and the Bank Group is subject to offering a price of no less than $6,236,000 and the elimination of any break up expense reimbursement. Competing bidders for the assets must submit a deposit equal to 10% of its bid plus evidence that it is able to consummate the transaction. After the last overbid, the court will allow Hilcorp the opportunity to overbid by an additional $50,000. Any further bidding will continue in $50,000 increments. If the court approves the purchase of the properties by a bidder other than Hilcorp, Forcenergy would pay up to the $100,000 that Hilcorp estimates it will incur as its costs and fees related to the sale. If a break-up expense reimbursement becomes necessary, Hilcorp will provide documentation of expenses to the court. Forcenergy also asked the court to approve its list and calculation of amounts to be paid to cure all of its pre-petition defaults. "If no amount is listed, the Debtor believes that there is no Pre-Petition Cure Amount due and owing to that party," the motion states. "The Debtor requests that, unless a party files an objection to the Pre-Petition Cure Amount so scheduled and serves a copy on Debtor?s counsel by the time to be fixed by the Court at the Procedures Hearing, such party should be forever barred from objecting to the Pre-Petition Cure Amount," the filing further contends. The company?s revenues declined after a decrease in gas and oil prices in late 1998 and early 1999. The declining revenues also negatively impacted the company after 1997 and 1998 acquisitions outlays. The court has not yet set a hearing date on the bidding procedures request. DBR ---- end ---- |------------------------------------------------------------------| |NOTE: The information in this email is confidential and may be | |legally privileged. If you are not the intended recipient, you | |must not read, use or disseminate the information. Although this | |email and any attachments are believed to be free of any virus or | |other defect that might affect any computer system into which it | |is received and opened, it is the responsibility of the recipient | |to ensure that it is virus free and no responsibility is accepted | |by Cadwalader, Wickersham & Taft for any loss or damage arising in| |any way from its use. | |------------------------------------------------------------------|
|