Argent Energy Trust, subsidiaries apply for CCAA creditor protection

By Caroline Salls

Pittsburgh, Feb. 17 – Argent Energy Trust and its Argent Energy (Canada) Holdings Inc. and Argent Energy (U.S.) Holdings Inc. subsidiaries are initiating proceedings at the Court of Queen’s Bench of Alberta to seek creditor protection under the Companies’ Creditors Arrangement Act (Canada), according to a news release.

Argent said the application for CCAA creditor protection is supported by its lending syndicate, its only secured creditor.

As a result of its lending syndicate accelerating payment under its credit facility and demanding repayment, depressed petroleum and natural gas prices, negative operating results, limited access to capital markets and the inability to obtain a suitable offer for the purchase of the assets of the applicants, Argent said the applicants were unable to restructure their affairs in an adequate manner.

As a result of those factors and after careful consideration of all other available alternatives, the company said the board of directors of each of the applicants determined that it is in best interests of the applicants to file for CCAA protection.

Argent said it will ask the court to appoint FTI Consulting Canada Ltd. as the monitor to oversee the CCAA proceedings. Argent management will still be responsible for the day-to-day operations of the applicants under the general oversight of the monitor.

If the applicants are granted CCAA creditor protection, Chapter 15 bankruptcy cases are expected to be filed to gain U.S. court recognition of the CCAA proceedings.

Argent said the applicants’ operations will continue uninterrupted during the creditor protection proceedings.

Argent Energy Trust announced last month that it had defaulted on its $45 million credit facility. On Nov. 30, the company’s banking syndicate reduced the facility’s borrowing base to $45 million from $80 million.

Argent is a foreign asset trust based in Calgary, Alta., with oil and gas properties located primarily in south Texas and Oklahoma.

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