Competitors Try to drop wrench in Rice plans to buy 27,000 mineral acres for $7,500/acrer from bankrupt Alpha--calling process rigged!

Pittsburgh Post-Gazette

Virginia-based Alpha, which filed for bankruptcy protection last August, arranged for Canonsburg-based Rice to serve as a stalking horse bidder in the auction of about 27,000 acres in Greene County. The arrangement says, barring higher bids, that Rice would get the assets for $200 million.

The deal also includes a $2 million break-up fee to be skimmed from the successful bid if it doesn’t belong to Rice, and $1.5 million for expenses associated with being the stalking horse bidder.

EQT Corp. and American Petroleum Partners, a Canonsburg-based startup founded in 2014 by a former Rice engineer, said those protections are unfair and unnecessary because there is more than one entity interested Alpha’s natural gas assets.

Both companies said they are willing to pay $200 million for the assets.

“Given this dynamic, it does not seem necessary to name a stalking horse bidder and to provide bid protections to ensure a dynamic auction,” EQT wrote in an objection filed with the bankruptcy court on Friday. “To the contrary, granting the motion, which includes a $4.5 million overbid, will only serve to advance the bid of Rice over other competitive bidders.”

Alpha, which is primarily a coal producer, said in its response that in today’s uncertain commodity climate it was most valuable to get a commitment from a company, then proceed to auction.

The stalking horse agreement also stipulates that shale gas development on that acreage will give deference to operations at Alpha’s Cumberland Mine nearby.

The company has “been concerned that adverse market conditions could result in initial bids for the [assets] being reduced or withdrawn,” Alpha wrote. “Absent an agreement now to lock in this value, there is no assurance that a bid of the amount offered by the PLR Stalking Horse would continue to be available in the future.”

A bankruptcy judge on Tuesday agreed and allowed the protections built into Rice’s bid to stay.

Alpha, a large coal miner, got its feet wet in shale development during a 2010 joint venture with Rice. It then sold its interest to Rice in 2013 and that same year inked another joint venture with EDF Energy to explore some 20,000 acres in Greene County.

In July 2015, Alpha paid EDF $126 million to become the sole owner of that program. Those are the assets now up for grabs.

The auction is scheduled to take place May 16.

Anya Litvak: alitvak@post-gazette.com or 412-263-1455.

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Bid Rigging is a daily occurrence in the O&G Industry, according to stories that came out of Aubrey's indictment, and his becoming State's Evidence the next day.

Maybe it's the bid rigging that affects other companies that should be declared illegal.

Taking money from landowners seems to be a National Past time with the O&G Industry. Just ask that farmer who signed away his lands ROW for little to nothing and is being held by production using 0.4 acres, with a lease that pays little to no income due to deductions that don't appear on his Royalty Statement.

It would be Super if the Each State would focus on the Elderly and insure that their last days were made somewhat brighter by ensuring they receive something respectably close to the Royalty amount on their leases.

After that improvement has been made, maybe a focus on Appalachia Counties being stolen from by the O&G companies. We could save Federal Money by ensuring Appalachia Landowners also received a Royalty respectably close to their lease required Royalty. 

This is America, we could do this. We would only need to indict a few state govs & atty gnls along with O&G ceo's to make this happen.

 

Yea, Stalking Horse. I need to try this myself.

This is going to get weirder.

Alpha Natural resources owns a large block of Rice stock. 

You have to ask yourself, is Rice trying to buy Alpha assets with Alpha money previously diverted to Rice per stock purchases?

Apparently, Alpha, while stumble bumming into bankruptcy, decided to be a shale stock player.

Now Rice has engineered a sweetheart deal, dressed up as an arms length transaction, to acquire valuable Alpha assets at below market sale prices, defrauding Alpha creditors.

None of the foregoing can even pass a smell test.

The Rice/Alpha people may think they are slick with the financial three card Monte, but I predict it will blow up in their faces.

I hope the Rice and Alpha folks end up facing serious bankruptcy fraud charges.

http://marcellusdrilling.com/2015/12/alpha-natural-resources-does-n...

I'd like to know when the idea of Rice purchasing the Alpha minerals was first discussed. (I'm using "minerals" as a term of art including the oil & gas estates)

Back when I was at the University, the big question, discussed ad nauseam, was: when does pre-petition planning become Bankruptcy Fraud?

Also, there is the question: when does post petition planning become Bankruptcy Fraud?

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