The sale was effectuated through a Chapter 11 Section 363 process in the U.S. Bankruptcy Court for the District of Delaware and closed in July 2018.
Founded in 2006 and headquartered in Highlands Ranch, CO, Nighthawk explores, develops and produces oil in the Denver-Julesburg Basin. It controls approximately 140,000 net acres in the oil-rich southeastern DJ Basin.
The company’s liquidity became severely constrained as a result of the precipitous decline in oil prices in 2014 and 2015, burdensome senior debt payments and an investment in a water-flood project that yielded unfavorable results. In order to recapitalize the business, Nighthawk retained SSG in January 2018 as its exclusive investment banker to assist in the exploration of strategic alternatives.
In addition to conducting a comprehensive pre-petition marketing process, SSG also engaged Nighthawk’s junior debt and equity holders to restructure and recapitalize the company, but was unable to reach a viable proposal with these stakeholders. After receiving multiple letters of intent from both strategic and financial buyers, Nighthawk ultimately reached an agreement with Morse to be a stalking horse bidder for the company’s assets.
In April 2018, select Nighthawk subsidiaries filed for Chapter 11 protection, with the remaining entities filing in May 2018. After SSG conducted a post-petition marketing process, Morse’s $18 million stalking horse bid was ultimately deemed to be the highest and best offer.
Morse Energy Capital Partners is a Denver-based private investment firm focused on lower middle market upstream oil and gas investment opportunities in North America.