Us Realm Powder River, LLC f/k/a Moriah Powder Riv
Bankruptcy

Status Report United States' Position Statement for Status Conference. Filed by Department of the Interior

District of Wyoming (Bankruptcy), wyb-2:2019-bk-20699

Current View

Full Text

Case 19-20699 Doc 487 Filed 01/08/21 Entered 01/08/21 17:00:39 Desc Main Document Page 1 of 3 MARK A. KLAASSEN United States Attorney NICHOLAS VASSALLO (WY Bar #5-2443) Assistant United States Attorney P.O. Box 668 Cheyenne, WY 82003-0668 Telephone: 307-772-2124 nick.vassallo@usdoj.gov IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF WYOMING In re: US REALM POWDER RIVER, LLC Case No. 19-20699 f/k/a MORIAH POWDER RIVER, LLC Chapter 11 EIN 47-4520716 Debtor in Possession UNITED STATES' POSITION STATEMENT FOR STATUS CONFERENCE In accordance with the Court's Order Scheduling Status Conference, the United States respectfully submits this position statement. Debtor is the lessee of record for, and holds other interests in, numerous federal oil and gas leases. Debtor is responsible for payment of federal royalties on oil and gas produced in connection with those leases. Debtor filed its Chapter 11 petition on October 31, 2019. For several months before filing its petition, Debtor had not been making its monthly royalty payments to the Department of the Interior Office of Natural Resources Revenue (ONRR). On April 27, 2020, ONRR filed a proof of claim for $3,931,289.89 in unpaid royalties as of the petition Case 19-20699 Doc 487 Filed 01/08/21 Entered 01/08/21 17:00:39 Desc Main Document Page 2 of 3 date. 1 Since filing the petition, Debtor has accrued $8,286,456.57 in additional unpaid royalties. Debtor has taken the position that it is assuming all its federal leases. After months of discussions, Debtor and the United States reached an agreement on a procedure by which the Debtor would cure its defaults and assume those leases. The terms of that agreement were incorporated into the Agreed Order entered by this Court on September 22, 2020. ECF No. 417. Debtor has not complied with the terms of the Agreed Order. The order required Debtor, by October 6, 2020, to pay the prepetition royalties due or refer the matter to this Court. Debtor has not paid any prepetition royalties and did not refer the matter to the Court until it filed its motion for status conference on November 11, 2020. The Agreed Order also required Debtor to submit all post-petition production and royalty reports, and pay all post-petition royalties, by October 6, 2020. Debtor finally submitted its post- petition royalty reports during the week of December 14, 2020. Debtor has not paid any post-petition royalties. The Agreed Order required Debtor to stay current on reporting. Debtor is out of compliance with that provision as well, as it has not submitted the reporting which was due on or before December 31, 2020. 1 ONRR is preparing an amended proof of claim which is expected to reflect a downward adjustment of the prepetition royalties based on information provided by Debtor to auditors. It is currently estimated that the adjusted amount is $3,271,065.55 Case 19-20699 Doc 487 Filed 01/08/21 Entered 01/08/21 17:00:39 Desc Main Document Page 3 of 3 Debtor has asserted that it has overpaid royalties in the past and that it is entitled to offset those amounts against its unpaid royalties. But Debtor has not yet filed a proceeding to pursue its offset theory, or objected to ONRR's claim, or filed amended royalty reports to correct its alleged overpayments. At the status conference, the parties and the Court should address all these issues and how the Debtor intends to bring itself into compliance with the Agreed Order. Respectfully submitted this 8th day of January, 2021. MARK A. KLAASSEN United States Attorney By: /s/ Nicholas Vassallo NICHOLAS VASSALLO Assistant United States Attorney CERTIFICATE OF SERVICE IT IS HEREBY CERTIFIED that on January 8, 2021, a true and correct copy of the foregoing UNITED STATES' POSITION STATEMENT FOR STATUS CONFERENCE was filed with the Court's CM/ECF system, which will send a notice of electronic filing to counsel of record. /s/ Elizabeth Kilmer United States Attorney=s Office