Remora Petroleum, a privately-held, Austin-based exploration and production company, is the latest energy company to file for bankruptcy protection.
Like seemingly every corporation filing for Chapter 11 these days, Remora and four affiliated companies chose the Southern District of Texas as its venue of choice for its corporate reorganization. The bankruptcy ended up in Judge David Jones’ court in the Houston division.
Remora turned to Houston bankruptcy partner Tad Davidson of Hunton Andrews Kurth to guide the debtors through their corporate reorganization. Also advising Remora from HuntonAK are Houston partners Joe Rovira, Harve Truskett and Houston associates Jared Grodin, Catherine Diktaban, Nathan Kramer and Philip Guffy.
Conway MacKenzie Management Services is Remora’s financial advisor, and Conway’s Houston senior managing director John Young is serving as the restructuring officer. Seaport Gordian Energy is serving as Remora’s investment banker.
Citing the difficult commodity prices that have plagued the industry since November 2014 that are now exacerbated by the novel coronavirus and the Saudi-Russia oil pricing war, Remora CEO George Peyton IV said Remora entities were left with “no viable option other than to commence these Chapter 11 cases.” The company listed approximately $85 million in debt.
But Remora entered bankruptcy court with a plan, which has the support of the company’s first and second lien lenders. Judge Jones scheduled a hearing on confirmation of the plan for Oct. 21.
Goldman Sachs is Remora’s largest unsecured creditor, owed nearly $28 million for a second lien credit agreement, but perhaps the most eye-catching unsecured creditor is the third largest: Sidley Austin’s Houston office. The firm says it’s owed $713,787 for legal work. Houston co-managing partner Kevin Lewis is listed as Sidley’s contact.
In 2018, a team of Houston Sidley lawyers advised Remora Royalties, an affiliated company not part of the bankruptcy, as it prepared for an initial public offering that never gained footing. According to Peyton’s affidavit, Remora Petroleum sought to carve off overriding royalty interests from a portion of its assets into Remora Royalties, a new entity that Remora Petroleum created in 2018.
The other purpose of Remora Royalties was to raise around $105 million capital through the IPO, but it became clear by the end of the year that the carve-off transaction and IPO “would not be successful based on the conditions of the market,” Peyton said. Remora withdrew its IPO plans in early 2019.
As we all know, the bankers don’t get get paid until after a deal closes, but the lawyers get paid no matter what (or at least, they’re supposed to). The Texas Lawbook previously reported that Houston Sidley partners George Vlahakos and Jon Daly advised Remora on the would-be IPO, while Latham partners Ryan Maierson and John Greer represented the underwriters.
Remora’s second largest unsecured creditor, Berkley Bonding Insurance, says it’s owed $4.5 million for litigation Remora was engaged in.
The fourth largest unsecured creditor is Katy, Texas-based Azure Midstream, which is owed $357,500. And Remora’s fifth largest creditor, JPMorgan Chase Bank, apparently is already trying to recover the $321,260 it loaned Remora under the Payment Protection Program.
A creditor’s rights lawyer has not appeared on the docket yet for Sidley, Berkley Bonding, Azure, or JP Morgan, but Goldman hired Dallas bankruptcy lawyers William Wallander, Bradley Foxman and Matthew Pyeatt from Vinson & Elkins to advocate for its rights in the reorganization.
Dallas Thompson & Knight lawyers David Bennett and Steven Levitt have appeared on the docket on behalf of Bank of Texas, which is serving as the prepetition first lien administrative agent.
Founded in 2011, Remora focuses on the acquisition and development of mature, long-lived producing properties. It owns operated and non-operated working interests across the Anadarko, Gulf Coast, Permian, DJ and Los Angeles basins.