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Templar Energy seeks Chapter 11 bankruptcy

A rig drilling for oil and natural gas in Oklahoma's Panhandle is silhouetted by a rising sun. [THE OKLAHOMAN ARCHIVES]
A rig drilling for oil and natural gas in Oklahoma's Panhandle is silhouetted by a rising sun. [THE OKLAHOMAN ARCHIVES]

Oklahoma City-based Templar Energy — a company started and grown but no longer owned by David Le Norman, chairman of the Oklahoma Petroleum Alliance, filed for Chapter 11 bankruptcy in Delaware this week, filings show.

The filings made by it and its subsidiaries, TE Holdings II and affiliated entities, were made June 1 after a previously-agreed-upon process between them and owed parties to sell its assets to settle its debt fell apart earlier this year.

The most recent bankruptcy filings follow an out-of-court restructuring process Templar undertook in 2016, eliminating $1.45 billion of debt and providing the company with a $365 million investment, making TE Holdings II Templar’s sole managing member.

Templar, through subsidiary Templar Operating, employs 97 workers.

The company, established in 2012, historically acquired developed and undeveloped oil and natural gas leasehold acreage in the Anadarko Basin by directly leasing oil and gas interests from mineral owners and by drilling and producing wells to access those reserves.

On May 31, Templar held working interests in about 2,165 oil and gas wells through leasehold positions covering about 273,400 largely contiguous acres across parts of northwestern Oklahoma and the Texas Panhandle.

Its wells target multiple, stacked formations in the western Anadarko, Canyon Resources and STACK plays.

A bankruptcy filing made by Templar CEO Brian Simmons states Templar operates about 57% of its wells. Average daily production as of Dec. 31 was about 21,000 barrels of oil (equivalent).

Simmons’ filing states Templar began looking at closing its operations after selling its assets after April 1, when backers of its revolving line of credit reduced it from $600 million to $415 million. At the time, Templar had $437 million drawn on the facility.

By January of this year, backers of the loan facility and Templar’s team agreed to sell all or substantially all of Templar’s assets to eliminate the company’s debt.

With the help of advisors, Templar contacted about 150 potential bidders on those assets, with dozens of those agreeing to review the company’s data as part of potential purchase considerations.

But when the energy market collapsed as the global war for crude oil market share between Saudi Arabia and Russia progressed and a global economic shutdown caused by COVID-19 happened, deals between Templar and potential buyers became unrealistic.

“These Chapter 11 cases are the result of the debtors’ significant prepetition marketing efforts and extensive arms’-length negotiation with the agent and lenders under the (loan facility),” Simmons stated as part of his filing.

He noted debtors have agreed with the loan backers to a bidding and auctioning process that will permit payments to all royalty owners, vendors who hold liens and other creditors in full.

The filing also states that 100% of the loan backers have agreed by vote to back Templar’s plans, and requests a hearing on the combined cases by mid-July.

As for its employees, Templar stated it seeks the court’s approval to continue to pay and provide benefits to them until their services are no longer needed.

Simmons filing stated periodic reductions in force are anticipated as part of the bankruptcy, adding that 93 of its employees (all except its top officers) currently are eligible to be compensated under an employee severance program, provided they continue working through their separation dates.

Of those, another 72 deemed critical because of technical, industry or customer-specific expertise also have received about half of what they are owed under a key employee retention plan. The filing requests authority to pay the remainder (about $1 million in total) under that provision either by Sept. 21, or when a restructuring of Templar is complete if that happens earlier.

“A stable workforce is critical to the uninterrupted continuation of the … business and the preservation and maximization of the value” of Templar's assets, Simmons stated.

“I believe that if the debtors are unable to honor all such obligations immediately, morale and loyalty will be jeopardized at a time when the support of these individuals is crucial.”

Jack Money

Jack Money has worked for The Oklahoman for more than 20 years. During that time, he has worked for the paper’s city, state, metro and business news desks, including serving for a while as an assistant city editor. Money has won state and regional... Read more ›