Alpha fields upset bid for oil and natural gas assets at May 16 auction

Coal producer Alpha Natural Resources, which is in Chapter 11 bankruptcy protection, announced May 17 that Vantage Energy Appalachia II LLC was named the successful bidder for certain oil and natural gas assets in Southwest Pennsylvania owned by its subsidiary, Pennsylvania Land Resources LLC.

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. “We continue to forge ahead toward the final phase of our restructuring.”

On Feb. 8, Alpha filed a motion with the U.S. Bankruptcy Court for the Eastern District of Virginia requesting approval of procedures to govern a marketing and sale process for Alpha’s core assets. These procedures were designed to implement a fair and competitive process for all qualified parties to bid for the debtors’ coal and natural gas assets. On March 11, the court entered a bidding procedures order approving the bidding and sales process.

On April 12, Rice Energy Inc. announced that its affiliate, Rice Drilling B LLC, had entered into a stalking horse asset purchase agreement with Pennsylvania Land Resources to acquire the PLR Assets, subject to higher and better offers from competing, qualified bidders. 

On May 16, Alpha conducted an auction among five qualified bidders for the sale of the PLR Assets. The $339.5 million cash bid submitted by Vantage Energy Appalachia II was then designated as the successful bid. U.S. Bankruptcy Court approval is required before the agreed-upon acquisition by Vantage Energy can close. A hearing on this matter is currently scheduled for May 26.

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.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.