According the most recently revised court order, ATP must submit to the court the identities of qualified bidders on 4/17, the auction will occur on 4/23 and the sale will be approved (or not) by the court, on 4/25.
One whisper I have heard from the industry is that the ORRI/NPI structure that ATP has in place on the DW fields is really causing lots of concern. The problem is in the way these deals are structured. If, for example Gomez doesn’t produce enough to pay the ORRI owner at Gomez, then the revenue is taken from other fields, say Clipper for example, in order to fund the ORRI/NPI. All the producing fields owned by ATP are in essence collateralized against one another to secure some of the ORRI/NPI. (Diamond is an example that did the well work on 4 or 5 of these fields). This could easily have the effect of chasing away bidders for individual fields because they don’t have any control over how other fields will perform and yet a problem at a field they don’t even own could dramatically effect the cash flow on the field they buy. Alternatively, potential buyers might be forced to bid on all the fields rather than just cherry pick the best one or two. Of course if they do buy the whole package, they will discount their bid to reflect the probability that they, in effect, will be on the hook for all of the ORRI/NPI financing that ATP saddled onto the fields. Either way, this could have a very large chilling effect on the bids as well as the number of bidders. Maybe even enough of an impact to cause the court to reject all bids.
I will be looking at the court documents for 4/17 to see who the bidders are. That will be very telling. |
