Delta Petroleum bid procedures, $57.5 million DIP facility approved

By Caroline Salls

Pittsburgh, Jan. 11 - Delta Petroleum Corp. received court approval of the bid procedures for the proposed sale of substantially all of its assets, according to a Wednesday filing with the U.S. Bankruptcy Court for the District of Delaware.

The company said it did not reach a stalking horse bid agreement with any interested purchasers, but the bid procedures allow Delta to enter a stalking horse agreement anytime before the bid deadline.

If a stalking horse bid is selected, Delta said it would pay that bidder a break-up fee and expense reimbursement of up to 3% of the proposed purchase price if it is not the high bidder at auction.

Bids are due by 5 p.m. ET on March 21 and must include a 5% cash deposit, according to court documents.

The auction will be held on March 26. The sale hearing is scheduled for March 28.

The initial overbid must be for at least $2 million more than the baseline bid, and subsequent bids must be made in increments of at least $2 million, the filing said.

In addition, the company received final approval of its $57.5 million debtor-in-possession facility from Whitebox Advisors LLC, according to a separate Wednesday court filing.

Interest will be 13% payable in cash plus 6% of pay-in-kind interest.

The facility will mature on June 30, 2012.

Delta will pay an $85,000 administrative agent fee.

Delta Petroleum, a Denver-based oil and gas exploration and development company, filed for bankruptcy on Dec. 15. Its Chapter 11 case number is 11-14006.

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