Teton Energy names Caerus winning bidder for substantially all assets

By Caroline Salls

Pittsburgh, Dec. 21 - Teton Energy Corp. has selected Caerus Oil and Gas LLC as the prevailing bidder after an auction for substantially all of its assets, according to an 8-K filed Monday with the Securities and Exchange Commission.

As a result of the auction, Teton said it will enter into a plan sponsorship agreement with Caerus, which is expected to include essentially the same terms as the plan sponsorship agreement the company previously entered with Rise Energy Partners II, LLC.

Under that agreement, Rise had agreed to fund Teton's emergence from bankruptcy and all existing equity interests in Teton would have been canceled.

Meanwhile, under the Caerus plan sponsorship agreement, Caerus will acquire 100% of the membership interests of the reorganized Teton for $20.05 million in cash and a contractual participation right to 50% of the profits related to some of Teton's assets, which will be transferred into one or more special purpose entities to be wholly owned by Caerus.

According to the 8-K, Rise is entitled to a $750,000 breakup fee and reimbursement of up to $200,000 of its sale-related expenses.

The Caerus transaction is subject to approval and confirmation by the U.S. Bankruptcy Court for the District of Delaware.

The confirmation hearing is scheduled for Jan. 8.

Teton, a Denver-based developer, producer and marketer of natural gas and oil properties, filed for bankruptcy on Nov. 8. Its Chapter 11 case number is 09-13946.

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