Bakken Buyer/Seller Updates

By The Bakken Magazine Staff | May 09, 2016

For buyers, the Bakken is an attractive market. For every Bakken-based distressed asset owner, overleveraged operator or entity experiencing the negative fiscal effects of low oil prices and are forced to sell, the Williston Basin always seems to attract a buyer.

When Emerald Oil Inc., a Bakken pure-play operator, voluntarily filed for Chapter 11 bankruptcy, the Denver-based company did so with a potential buyer already looming. Latium Enterprises Inc., an investments and acquisitions company with offices in the U.K. and New York City, has entered into an agreement to purchase the operator’s Williston Basin assets. Efforts made by Emerald during the past nine months to sell undeveloped acreage and other assets were not enough to meet lender conditions.

Black Ridge Oil & Gas Inc., a non-operator based out of Minnesota, has also been acquired. Chamber’s Energy Management LP, Black Ridge’s subordinated lender, has purchased the company and its assets to form a new entity—Black Ridge Holding Co. LLC. Ken DeCubellis, Black Ridge CEO, said that at year’s end the company’s total debt was just over $60 million but its assets were valued at just under $30 million. Through the terms of the buyout agreement, DeCubellis will continue to manage the oil and gas assets now owned by BRHC in exchange for a management fee. “The restructuring transaction provides a clean, clear path forward for us to focus on our asset management business,” he said, “which we believe has the potential to produce equity returns far in excess of those that could have been derived from our previous asset base in the current commodity price environment.”

Based in Austin, Texas, Forestar Group Inc. has moved out of its Bakken and Three Forks oil and gas assets through a sale to a undisclosed buyer valued at roughly $60 million. The real estate development company will sell roughly 140 producing wells and 9,000 net acres of leaseholds.

Chuck Jehl, chief financial officer of Forestar, said that in combination with the company’s previous transaction to sell $21 million worth of oil and gas assets in Nebraska and Kansas, these Bakken moves will “complete our exit of non-core oil and gas assets.” Jehl added that the exit transactions will also eliminate the company’s working interest exposure to fluctuations in the price of oil and gas.

Sanjel Corp., a global oilfield services business, also had no issue selling some of its Williston Basin assets due to low revenue generation linked to the price of oil. In April, Sanjel announced the sale of its U.S. fracturing, coiled tubing and cementing assets to Liberty Oilfield Services. The value of the transaction was not disclosed. Liberty operates in the Williston, DJ and Powder River basins. Sanjel has also filed for Chapter 15 of the U.S. Bankruptcy Code, an option created for entities operating within the U.S. that are not-based in the U.S.