Emerald Oil Files For Chapter 11 -- March 23, 2016; Buy High; Sell Low?

Bizjournal is reporting:

Emerald Oil Inc. said it's filed voluntary Chapter 11 petitions in the U.S. Bankruptcy Court for the District of Delaware. Its oil and gas operations are located in the Williston Basin of North Dakota and Montana.

Prior to the bankruptcy filing, Emerald said it reached a deal with Latium Enterprises Inc. of England to sell "substantially all of Emerald's assets" and to serve as a "stalking horse" in the bankruptcy process.

"The plan we are announcing today will provide for continuity in Emerald's current and future business operations. This process is the only path going forward and should enable the business to execute a turnaround in the current low oil price environment.

Importantly, Emerald's plan and the Latium transaction would allow the business to continue to operate and would provide a sound path for potential recovery for company stakeholders," said McAndrew Rudisill, president and CEO of Emerald, in a statement.

More here:

Emerald has obtained $20 million in post-petition debtor in possession financing to maintain operations during the restructuring. Prior to the Chapter 11 filing, Emerald executed a non-binding term sheet with privately-held Latium Enterprises under which Latium has proposed to purchase substantially all of Emerald’s assets and will serve as a “stalking horse” in a sale process under section 363 of the Bankruptcy Code. Shares of EOX are at $1.37 within a 52-week range of $0.39 – $19.00.  

As of December 31, 2014, the company controlled the rights to mineral leases covering approximately 122,000 net acres. 

$20 million / 122,000 net acres = $165/acre

From an earlier post, some history regarding Emerald Oil:

• 122,000 net acre position in the core of the Williston Basin -- presentation, 1Q15; 
• January, 2014: acquires 20,800 net acres in Williams, McKenzie; $3,650/acre; around 70,000 net acres total in the Bakken
• August, 2013: sees 2,850 boepd exit rate in December, 2013;
• June, 2013: a two-rig program
• EOX will sell Colorado acreage; focus on its 48,800 net acres in the Bakken, January 8, 2013
• EOX: effective September 4, 2012; acquired 4,500 net acres; $3,200/acre; McKenzie County; ~ 48,000 net acres in the Bakken?

Looks like the Brits are getting a steal.