A judge at the U.S. Bankruptcy Court for the Eastern District of Virginia on May 26 approved a motion by coal producer Alpha Natural Resources to sell some oil and gas assets in southwest Pennsylvania held by Alpha’s Pennsylvania Land Resources LLC (PLR) subsidiary.
Rice Drilling B LLC was the original stalking horse bidder for these assets. But at a May 16 auction, Vantage Energy Appalachia II LLC submitted a higher offer and became the prospective buyer under an Asset Purchase Agreement (APA).
Vantage’s winning cash bid of $339.5 million far exceeded the previously announced stalking horse bid of $200 million for those same assets. Under bankruptcy court rules, an initial bidder, called a stalking horse bidder, is lined up, then an auction is held to see if there at any higher offers.
“While we were not surprised with the interest the PLR Assets generated from operators in the region, the strategic sale of these assets will only help to maximize the value of the estate for the benefit of all stakeholders,” said Alpha Chairman and CEO Kevin Crutchfield in a May 17 statement. “We continue to forge ahead toward the final phase of our restructuring.”
Alpha and certain of its wholly-owned subsidiaries filed voluntary petitions to reorganize under Chapter 11 of the United States Bankruptcy Code in August 2015.
Alpha Natural Resources is one of the largest and most regionally diversified coal suppliers in the United States. With affiliate mining operations in Virginia, West Virginia, Kentucky, Pennsylvania and Wyoming, Alpha supplies metallurgical coal to the steel industry and thermal coal to generate power to customers on five continents.