Houston Business Journal

With a buyer secured for Houston-based Alta Mesa Resources Inc. and its affiliated companies, more job cuts have been announced for the company’s headquarters.

Houston energy co. cuts jobs, closing headquarters after bankruptcy auction -oilandgas360

Alta Mesa Rig Site – Oil & Gas 360

Alta Mesa Services LP notified the Texas Workforce Commission on Feb. 18 that it is permanently laying off all 91 employees from its headquarters at 15021 Katy Freeway, Suite 400. The job losses are expected to occur over the 60-day period beginning Feb. 18, according to the Worker Adjustment and Retraining Notification Act letter sent to the TWC.

The WARN Act requires a 60-day notice period, so any employee who is laid off before the end of that period will receive full pay and benefits for the remainder of the period.

At the end of the notice period, the entire facility is slated to close, the WARN letter states.

None of the affected employees are represented by a union or have bumping rights, meaning workers with more seniority cannot take the jobs of those with less seniority.

Alta Mesa Resources was formed in February 2018, when a multibillion-dollar deal combined Silver Run Acquisition Corp. II, a blank-check company led by former Anadarko CEO James Hackett; Alta Mesa Holdings LP, an Oklahoma oil-and-gas producer; and Kingfisher Midstream LLC, a regional pipeline company.

Last February, the company informed the TWC it cut 58 jobs at its headquarters. Another 13 jobs were cut in April 2019. The company filed for Chapter 11 bankruptcy protection on Sept. 11, 2019.

Last month, a bankruptcy auction was held for substantially all of the upstream oil and gas assets of Alta Mesa Holdings LP and its subsidiaries as well as its midstream arm, Kingfisher Midstream LLC and related subsidiaries.

Alta Mesa had initial bids from BCE-Mach III LLC of $85.25 million for Kingfisher and $224.75 million for the rest of Alta Mesa’s assets, for a $310 million total. The agreements Alta Mesa has with BCE-Mach III established it as the stalking horse bidder in a bankruptcy auction that took place Jan. 15. The auction resulted in a final bid of a combined $320 million for the companies’ assets, a company spokesperson said.

Court approval was necessary to finalize the deal, which was expected to close in February, according to the spokesperson and a press release.

BCE-Mach III is the third partnership between Houston-based private equity firm Bayou City Energy Management LLC and Oklahoma City-based oil and gas producer Mach Resources LLC. The Alta Mesa-Kingfisher deal is the sixth acquisition made by partnerships between the two companies. Mach will operate the Alta Mesa-Kingfisher assets.

“This was a unique opportunity to acquire a sizable cash-flowing asset with the supporting midstream infrastructure, through a bankruptcy process, in an area of our team’s expertise and still have an extensive inventory for future development,” Mach CEO Tom L. Ward said in the release. “Our strategic aim in partnership with BCE has been to aggressively consolidate and maximize underdeveloped, undercapitalized or otherwise distressed areas in the Mid-Continent. We have been successful in buying assets at a discount, increasing production in a cost-effective manner and avoiding overspending. In a lot of ways, we have gone back to the fundamentals that were true when I began my career.”

BCE-Mach III is being represented by Kirkland & Ellis LLP as legal adviser and UBS Securities LLC as financial adviser.

   – Assistant managing editor, Houston Business Journal

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