Houston’s Terra Energy Partners buys Ursa Resources business in $60M deal

The biggest Western Slope natural gas producer is buying Ursa Resources’ business and wells two months after the company filed for Chapter 11 bankruptcy protection.

Houston-based Terra Energy Partners LLC agreed to pay $60 million to acquire Denver-based Ursa Piceance Holdings LLC and its subsidiaries after a bankruptcy court sale.

The sale of Ursa Piceance’s business includes its 41,000 acres of mineral rights and 579 operating wells.

Privately held Terra Energy Partners succeeded with a bid at auction in federal bankruptcy court in Delaware earlier this month. U.S. Bankruptcy Judge Brendan L. Shannon signed off on the deal Nov. 23, according to court documents.

Terra Energy, which operates as TEP Rocky Mountain, produces natural gas from 5,300 wells on 370,000 acres in northwest Colorado’s Piceance Basin.

The deal is the latest transaction in the oil and natural gas industry that has been shaken by a historic collapse in the demand for fuels triggered by the Covid-19 pandemic.

Coming off years of weak natural gas prices, the collapse of crude oil has pushed many companies into filing for bankruptcy protection.

Ursa Piceance Holdings and its operating and pipeline subsidiaries filed for bankruptcy protection Sept. 2 with $282 million in debt on its books.

A well pad it developed in 2017 proved disappointing and, afterward, Ursa could afford to drill no new wells with natural gas prices so low and creditors steadily reducing its lines of credit. The passage of Senate Bill 181 in 2019 clinched the inability of the company to raise more capital, said Jamie Chronister, the company’s restructuring officer, in bankruptcy filings.

Ursa Piceance had tried without success to sell the business or its assets outside of bankruptcy court. Buyers were troubled and ultimate dissuaded from buying by the financial obligations in a pair of Ursa Piceance’s pipeline agreements, the company said.

The 21-employee company has offices in Rifle and Denver and producing wells in the western Colorado areas of Boise Ranch, Battlement Mesa, Gravel Trend and Castle Springs.

Ursa Piceance was formed in 2012 after acquiring wells and mineral rights acreage from Denver-based Antero Resources, which was exiting northwest Colorado to focus its natural gas production on the Marcellus and Utica shale formation in West Virginia, Pennsylvania and Ohio.

By Greg Avery – Senior Reporter, The Denver Business Journal

Courtesy of The Houston Business Journal

https://www.bizjournals.com/houston/news/2020/11/30/terra-energy-ursa-piceance-natural-gas-bankruptcy.html