Did You know?the IEA includes ethanol and bio fuels in the 93.5 million bbls/d of oil production. amounts to about 2 million bbls/d...the number includes all liquids
bankruptcy doesn't end production..
Dune Energy to begin 'swift' bankruptcy process
By Tom Corrigan
Published: Mar 11, 2015 10:25 a.m. ET
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Dune Energy Inc., a Houston-based energy company, has received a bankruptcy judge's approval to kick off a marketing and sale process, one that aims to keep the business operating while in Chapter 11.
During the company's first appearance in court Tuesday, U.S. Bankruptcy Judge H. Christopher Mott signed off on a series of so-called first-day motions that will ease Dune's transition into bankruptcy protection, allowing it to pay employees, to access its bank account and to otherwise continue normal operations.
Judge Mott also signed an interim order allowing the company to drawn down up to $3 million of a larger $10 million loan from a group of lenders led by Bank of Montreal. A final hearing on the loan was scheduled for April 2.
As a condition of the bankruptcy financing, Dune's senior lenders are requiring that the company put itself up for auction.
According to proposed bidding procedures, which weren't brought before Judge Mott at Tuesday's hearing, Dune will pursue a "fairly swift sale process," according to attorney Charles Beckham. Under the currently proposed timeline, Dune will hold an auction June 9, with a sale hearing to follow shortly after.
Prebankruptcy marketing efforts failed to produce a lead bid, court papers say.
Dune and two subsidiaries filed for Chapter 11 protection Sunday, after falling oil prices caused a proposed merger with EOS Petro Inc. to fall apart last week. The proposed merger would have valued Dune at $135.9 million, but EOS was ultimately unable to line up the financing to complete the deal.
The publicly traded company listed assets of $229.5 million and debts of $144.2 million. Senior lenders are owed $39 million, while second-lien lenders are owed nearly $68 million.
Dune is the latest among a number of companies---including Endeavour International Corp., BPZ Resources Inc., Cal Dive International Inc. and Gasfrac Energy Services Inc.---that have recently sought bankruptcy protection as a result of plummeting oil prices. Several others have skipped payments to bondholders and warned that bankruptcy is a possibility.
In a declaration filed with the court, Dune's restructuring chief, Donald R. Martin, said the decline in oil prices cut into the company's bottom line, with 2014 revenue of $43 million down from $55.5 million in the prior year. After Dune tripped financial covenants on its loan, its lenders limited how much the company could borrow, prompting the Chapter 11 filing.
Founded in 1998, Dune's holdings include properties covering more than 74,000 gross acres across 15 producing oil and natural gas fields in Texas and Louisiana. Energy produced is sold primarily to domestic pipelines and refineries, court papers say.
- Patrick Fitzgerald contributed to this article.
Write to Tom Corrigan at Tom.Corrigan@wsj.com
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