NGL Energy Partners LP provides this update on certain bankruptcy proceedings related to a customer of its FERC regulated subsidiary Grand Mesa Pipeline, LLC.
Extraction Oil & Gas, Inc., a firm that filed Chapter 11 bankruptcy in June of this year, is a customer of Grand Mesa under two Transportation Services Agreements originally entered into in 2014 – one is a TSA originally entered into with Extraction as the anchor shipper of the pipeline and the other is a much smaller TSA that was originally entered into between Grand Mesa and a different producer, but that Extraction was assigned.
A day after filing bankruptcy, Extraction filed a motion to reject the two agreements with Grand Mesa. In recent days, the bankruptcy court granted Extraction’s motions to reject both of the long-term agreements, prompting Grand Mesa to appeal the court’s ruling.
Grand Mesa contends the Federal Energy Regulatory Commission’s approval of both agreements takes precedent over the bankruptcy court’s ruling.
NGL and Grand Mesa announced this week that the FERC agrees with Grand Mesa’s position and on September 17, 2020, the FERC filed a Statement In Support of Motion of Grand Mesa Pipeline, LLC. However, on October 14, 2020, the bankruptcy court entered an order denying the Lift Stay Motion. Both Grand Mesa and the FERC have appealed this ruling.
Grand Mesa is also fighting Extraction’s plan of reorganization, contending the plan did not contain adequate information.
“Grand Mesa will continue to request that it and the other stakeholders within the bankruptcy are given full and meaningful information relating to Extraction’s proposed Plan of Reorganization and will vigorously defend its rights as necessary during this bankruptcy proceeding,” stated the company in its Tuesday announcement.
Click here to view the announcement through Business Wire.