Renamed Delta out of bankruptcy, completes Laramie deal
Delta Petroleum Corp. announced today that it has consummated its bankruptcy reorganization plan, changed its name and completed creation of a local joint venture with Laramie Energy II.
The plan was confirmed by U.S. Bankruptcy Court Aug. 16.
Delta is now called Par Petroleum Corp. Laramie sponsored its bankruptcy plan, and the two have pooled their assets in Mesa and Garfield counties under a joint venture called Piceance Energy, LLC.
Laramie owns two-thirds of Piceance Energy, and Delta Petroleum one-third. Piceance Energy entered into a new, $140 million credit agreement and distributed about $74.1 million to Par Petroleum and $23.8 million to Laramie, subject to adjustment based on a July 31 joint venture transaction date.
Par will use that and other funding to pay bankruptcy expenses, secured debt, priority claims and other costs.
Under the reorganization, $265 million in unsecured notes were converted into equity. The Zell Credit Opportunities Master Fund, L.P., an affiliate of Equity Group Investments, and clients of Whitebox Advisors are the two largest equity holders in Par Petroleum.
Delta’s shareholders prior to Chapter 11 emergence receive no consideration under the plan, the company said. About a third of Delta’s shares were owned by billionaire and casino owner Kirk Kerkorian’s Tracinda Corp., and Kerkorian has sued an advisor who persuaded him to buy $684 million in Delta stock in 2008, according to media reports.
Delta had lost $429.4 million in the third quarter of last year and had close to $150 million in debt coming due this year when it filed for bankruptcy late last year.
Delta held oil and gas leases for the equivalent of about 22,000 acres in the Collbran area and had 190 producing wells there as of the end of 2010. Laramie will keep assets including oil and gas holdings outside Garfield and Mesa counties, but its operations have been focused on the two counties.
Delta has been pursuing numerous new drilling permits in Mesa County, helping the county rank third statewide in permit approvals through early August, with 132 permits.