Add Fort Worth, Texas based Atlas Resource Partners, L.P. to the list of those filing for bankruptcy amidst the energy downturn. The company says it will file a prepackaged Chapter 11 plan of reorganization to reduce its debt by nary $900 million and hand control of the firm over to its lenders.
Atlas is accomplishing the debt reduction by converting the $668 million of the Partnership’s outstanding senior notes into 90% of the common equity of the restructured company. The company has extensive holdings and operatives in Oklahoma. While many of its 8,600 producing natural gas and oil wells are in the Barnett Shale of Texas, some are in the Mississippi Lime in Oklahoma.
Just four years ago, Atlas paid nearly $40 million to acquire 8,500 net undeveloped acres in northwest Oklahoma from Equal Energy, Ltd. The move increased Atlas’ position in the Mississippi Lime to nearly 20,000 acres in Alfalfa, Garfield and Grant Counties.
The Partnership expects to operate its oil and gas properties in the ordinary course during the restructuring process. All suppliers, vendors, employees, royalty owners, trade partners and landlords will be paid in full under normal terms for goods and services provided prior to, during, and subsequent to the consummation of the Restructuring Plan. The Partnership’s existing trade contracts and terms will also be maintained prior to, during and subsequent to the process.
The Partnership expects to emerge from the execution of the Restructuring Plan as Titan Energy, LLC, which will be classified as a corporation for U. S. federal income tax purposes, and will be publicly traded on an exchange or quoted on an over-the counter market. Titan Energy will be led by Ed Cohen, Executive Chairman; Jonathan Cohen, Executive Vice Chairman; Daniel Herz, Chief Executive Officer; Mark Schumacher, President; and Jeffrey Slotterback, Chief Financial Officer.