Current weather

  • Overcast
  • 50°
    Overcast
  • Comment

Buccaneer bankruptcy slows gas fight with CIRI

Posted: July 8, 2014 - 10:13pm

A dispute over natural gas rights and royalties is on hold as the producer works out its finances in a South Texas Bankruptcy Court.

Representatives for Houston-based Buccaneer Energy, Cook Inlet Region Inc. and the State of Alaska convened at the Alaska Oil and Gas Conservation Commission office in Anchorage Monday for what ended up being a very brief hearing in the fight over gas Buccaneer is producing from its Kenai Loop field to which CIRI says it has a right.

The Southcentral Native corporation claims Buccaneer owes royalties for gas the company pulled from CIRI land that is adjacent to the Kenai Loop pad. Buccaneer once held a now-terminated gas lease with for the CIRI property. It does not dispute that the drainage is occurring from two of the three wells, KL-1 and KL-3, on the Kenai Loop pad.

The Alaska Mental Health Trust Authority also owes it money, CIRI says, for the royalties the authority has received from Buccaneer that stemmed from draining CIRI’s gas. The Alaska Mental Heath Trust Authority owns the Kenai Loop property that Buccaneer is leasing.

CIRI is having its subsurface rights violated as gas is being pulled from beneath its property by the KL-1 and KL-3 wells without a pooling agreement in place, it argues.

CIRI Vice President of Land and Energy Development Ethan Schutt said during an April hearing on the issue that nearly 8 million cubic feet of gas per day is being produced by the wells.

Buccaneer once had a gas lease for the CIRI land that was terminated by the Native corporation for undisclosed reasons.

AOGCC chair Cathy Foerster said the commission would not rule on the conflict until a stay put in place on Buccaneer and associated proceedings by the court while the bankruptcy situation is sorted out is lifted.

The petroleum company filed for Chapter 11 bankruptcy May 31.

A quick look at Buccaneer’s financial statements made the bankruptcy claim predictable, Schutt said in an interview.

Buccaneer estimated its assets at up to $50,000 with liabilities between $50 million and $100 million in its court filings. The company also proclaimed its belief that funds would be available for unsecured creditors.

The quick Monday hearing was the third meeting of the parties before the AOGCC since early April. All the while, the commission has encouraged the parties to negotiate a settlement without commission intervention. The Alaska Department of Natural Resources, which oversees the Mental Health Trust Authority and receives gas royalties through the Division of Oil and Gas, has also been a part of negotiations that have been close to reaching an agreement several times, involved parties have said.

Schutt said negotiations have not taken place in recent weeks.

Buccaneer filed for bankruptcy a day before it was to set up an escrow account at an Alaska bank to hold the revenue from Kenai Loop gas sales until a resolution could be reached per an earlier AOGCC order. As of mid-June that account had not been established as Buccaneer asked for clarifications to details in the commission order.

On Monday, Schutt said he did not know if the account had been set up. Buccaneer has chosen to remain quiet about its court matters and the commission said it cannot comment on an ongoing case.

CIRI filed a motion for relief from the automatic stay in the South Texas court July 1, stating that Buccaneer’s finances won’t be resolved until the AOGCC case is.

“A determination of the parties’ rights is essential to (Buccaneer’s) efforts to sell their assets, as well as make a distribution of the escrowed funds possible,” the motion states.

Schutt said it is unclear when the matter will be ultimately be settled as it will likely take 30 to 60 days after the stay is lifted before the AOGCC takes it up again.

“There’s a lot of balls in the air and it’s very complex,” he said.

A hearing on CIRI’s motion is set for August 5, at noon Alaska Daylight Time, at the federal courthouse in Houston, Texas.

Elwood Brehmer can be reached at elwood.brehmer@alaskajournal.com.

  • Comment

Comments (1) Add comment
ADVISORY: Users are solely responsible for opinions they post here and for following agreed-upon rules of civility. Posts and comments do not reflect the views of this site. Posts and comments are automatically checked for inappropriate language, but readers might find some comments offensive or inaccurate. If you believe a comment violates our rules, click the "Flag as offensive" link below the comment.
jford
1666
Points
jford 07/08/14 - 10:57 pm
0
0
Buccaneer consists of scam artists.

These grifters got Alaska to front them millions of dollars supposedly to pay their operating costs and it was supposed to be such a good deal for Alaska.

Now they claim they have assets worth 50,000 dollars, but they owe 100 million.

Scam artists and grifters.

Know who gave these bankrupt scam artists the millions?

Parnell and the Republican majority.

Here's more money looted from our treasury, and handed over to corporate grifters and scam artists by Parnell and the Republican majority.

Vote them out. Parnell, Chenault, Micciche, any of the Republican majority, ...vote them all out,

…vote them out before they bankrupt Alaska.

Back to Top

Spotted

Please Note: You may have disabled JavaScript and/or CSS. Although this news content will be accessible, certain functionality is unavailable.

Skip to News

« back

next »

  • title http://spotted.peninsulaclarion.com/galleries/321268/ http://spotted.peninsulaclarion.com/galleries/321253/ http://spotted.peninsulaclarion.com/galleries/321248/
  • title http://spotted.peninsulaclarion.com/galleries/321243/ http://spotted.peninsulaclarion.com/galleries/321208/ http://spotted.peninsulaclarion.com/galleries/320593/
  • title http://spotted.peninsulaclarion.com/galleries/321173/ http://spotted.peninsulaclarion.com/galleries/321163/
My Gallery

CONTACT US

  • 150 Trading Bay Rd, Kenai, AK 99611
  • Switchboard: 907-283-7551
  • Circulation and Delivery: 907-283-3584
  • Newsroom Fax: 907-283-3299
  • Business Fax: 907-283-3299
  • Accounts Receivable: 907-335-1257
  • View the Staff Directory
  • or Send feedback

ADVERTISING

SUBSCRIBER SERVICES

SOCIAL NETWORKING

MORRIS ALASKA NEWS