The debts of ATP Oil & Gas Corporation (Bulletin Board: ATPAQ) in Israel exceed NIS 200 million. The debt was incurred for the drilling of the Shimshon exploratory well, which discovered a small natural gas reservoir of 0.6 trillion cubic feet (TCF).
Today, a motion was filed with the Tel Aviv District Court to grant an exclusive 30-day permit to Moncrief Oil International Inc. to manage negotiations to acquire the rights of ATP subsidiary ATP East Med Number 1 BV to the Shimshon and Daniel East and West licenses. If the negotiations succeed, the company hopes to obtain permission from the Petroleum Supervisor to transfer the rights to Moncrief. If the negotiations fail, on November 15, ATP East Med's creditors will hold an auction between Moncrief and other companies to buy the company's assets.
In mid-August, ATP filed for Chapter 11 bankruptcy protection with the US Bankruptcy Court for the Southern District of Texas. The company stated that it owed $3.4 billion to 1,000 creditors. ATP owns 40% of the Shimshon and Daniel East and West licenses, of which 5% is held directly and 35% through ATP East Med. Its main partner in the licenses is Isramco Ltd. (Nasdaq: ISRL; TASE: ISRA.L), controlled by Kobi Maimon. ATP's rights to the Israeli licenses are not protected by the US bankruptcy protection, because they are held by ATP East Med, a company that was set up at the order of the Ministry of Energy and Water Resources.
ATP's Israeli assets were seized at the request of a Scottish drilling company, which is owed NIS 6 million. On Thursday, Tel Aviv District Court Judge Varda Alshech agreed to the Scottish company's motion to appoint a trustee for ATP East Med's assets.
On September 20, ATP signed a no-shop agreement with Moncrief Oil, but ATP's creditors have now asked the court to approve an abbreviated 30-day process, instead of the 90 days that ATP promised Moncrief.
Published by Globes [online], Israel business news - www.globes-online.com - on October 15, 2012
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