US Realm Powder River, LLC has filed a motion with the United States Bankruptcy Court for the District of Wyoming seeking approval to sell substantially all of its assets—including approximately 6,800 coal-bed methane gas wells and mineral leases covering more than 1,000,000 acres—to Pronghorn Resources, LLC for $300.00 plus the assumption of certain liabilities and significant creditor claim waivers.
The proposed transaction, filed November 18, 2025, includes a critical component that substantially enhances the value to the estate: creditor-signatories to a Sale Support Agreement have agreed to waive and release more than $150 million in unpaid post-petition expenses, as well as additional pre-petition claims against the debtors.
The Sale Support Agreement: Core Economic Component
The motion emphasizes that the Sale Support Agreement (SSA) represents a substantial portion of the transaction's value. According to the filing, "In connection with and as a condition to closing on the Sale Transaction, the Debtors and certain creditors of the Debtors entered into a Sale Support Agreement."
Under the SSA, creditor-signatories have agreed to waive and release "any and all pre- and post-petition claims against the Debtors for amounts alleged to be owed prior to the closing of the Sale Transaction," specifically including:
- Administrative claims under Section 503 of the Bankruptcy Code
- Secured claims
- Claims entitled to priority under Section 507 of the Bankruptcy Code
The motion states: "Considering US Realm's estate has incurred more than $150 million in unpaid post-petition expenses to the creditor-signatories to the SSA since the commencement of the US Realm Bankruptcy Case (in addition to pre-petition claims against the estate), the Debtors submit the waivers and releases contained in the SSA provide significant value to the Debtors' estates as part of the Sale Transaction."
The creditor-signatories to the SSA have also agreed "to support the Sale Transaction, including the Court's approval of the APA, Buyer's acquisition of 100% of the membership interests of 4P in connection with the Sale Transaction, and the Debtors' assumption and assignment of executory contracts and unexpired leases as described on the APA to Buyer."
Background of the Bankruptcy Case
US Realm filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code on October 31, 2019, in Case No. 19-20699. The case has now been pending for approximately six years.
The company operates in Wyoming's Powder River Basin. According to the motion, "US Realm holds significant mineral leases and owns approximately 6,800 coal-bed methane gas wells (approximately 3,900 are currently producing)." The company "is a party to numerous mineral leases with real estate owners covering more than 1,000,000 acres to exploit natural gas reserves."
US Realm itself has no employees. The motion states: "While US Realm holds the Mineral Leases and owns the Gas Wells, US Realm has no employees and thus is unable to operate the Gas Wells or otherwise bring the mineral product to market on its own. US Realm thus relies on services provided by its affiliates, including CCE and PRM, to produce natural gas."
Carbon Creek Energy (CCE) serves as the contract operator of the gas wells, while Powder River Midstream (PRM) provides pipeline assets and midstream compression and gas transportation services. US Realm Wyoming Ranches owns a small parcel of real estate used for office space and equipment work.
On September 8, 2025, CCE, PRM, and Wyoming Ranches each filed their own voluntary petitions for relief under Chapter 11. On September 11, 2025, the Court entered an order directing joint administration of the related cases under Case No. 19-20699.
Key Developments During the Bankruptcy
Mark Welch was appointed Chief Restructuring Officer of US Realm on March 30, 2021. The CRO Order permitted him to "oversee the analysis and investigation of possible recapitalization, sale or merger options and the determination of whether any such possibilities could reach fruition."
On May 22, 2023, the Court authorized US Realm to employ SSG Advisors, LLC as its investment banker "to provide investment banking services to US Realm focusing on the sale of all or part of US Realm's business."
On January 24, 2024, the Court authorized US Realm to acquire the equity interests of CCE and PRM and to "use estate resources to commence and pursue bankruptcy filings for CCE and PRM to facilitate a sale of US Realm's and its affiliates' assets and/or equity interests through a § 363 sale, chapter 11 plan, or combination thereof."
On February 1, 2024, "all the managers of CCE and PRM were voluntarily removed, Mark Welch was appointed as the Manager of the CCE and PRM, and US Realm Ventures II, LLC, through its subsidiary US Realm CBM Investments LLC, assigned and transferred 100% of the membership interests in the CCE and PRM to US Realm allowing US Realm to obtain operational control over CCE and PRM."
Marketing Process Yields Single Bidder
The motion describes an extensive marketing process that ultimately produced only one acquisition proposal. According to the filing, "The CRO and SSG contacted approximately 280 parties to solicit interest by phone or email, consisting of both strategic purchasers and financial investors, including public and private companies of all sizes."
The results of this outreach were:
- 19 parties executed non-disclosure agreements and gained access to the data room
- 55 parties passed on the inquiry
- 206 parties did not respond
The motion states: "Ultimately, US Realm received one indication of interest, but no former offer was ever received from this party."
Pronghorn Resources was the sole party to submit an acquisition proposal. "The Buyer initiated due diligence in April 2024 and provided an Acquisition Proposal in June 2024. From June 2024 through July 2025, the Buyer continued to evaluate and conduct due diligence which included discussions with principal creditors to formulate a go forward plan."
After months of negotiations, the debtors and Pronghorn reached an agreement. The motion states: "After months of arm's length negotiations between the Debtors, the Buyer, and a number of the Debtors' creditors, the Debtors and the Buyer reached an agreement on the terms of an asset purchase agreement (the 'APA') for the Buyer's purchase of the Mineral Assets (the 'Purchased Assets')."
Scope of Purchased Assets
The motion lists the following assets to be sold:
- All oil and gas leases, subleases and other similar instruments
- All oil and gas rights held in fee
- The gas wells and related equipment, including wellhead equipment, downhole equipment, casing, tubing, pumping units, transportation and gathering lines, compressors, pumps, tanks, meters, water lines and infrastructure
- Warranty claims and avoidance actions under Chapter 5 of the Bankruptcy Code
- Insurance benefits relating to acts, omissions, or events occurring after the Effective Time
- Business books and records
- Technical data
- Tangible personal property
- Midstream assets
- Business intellectual property
- Contracts
- Permits
- Surface Use Agreements
- All hydrocarbons produced from the assets after the Effective Time
- All collateral in place for bonds or surety agreements
- All deposits, capital credits, cash equivalents, refunds, and similar assets
Consideration for the Transaction
The motion states: "The consideration for the Purchased Assets consists of three hundred dollars ($300.00) in cash plus the assumption of Assumed Liabilities as set forth and defined in the APA."
The Assumed Liabilities include:
- Liabilities under leases and contracts arising on or after the Closing Date or requiring performance after the Closing Date, including plugging, abandonment, reclamation, or remediation obligations
- Liabilities arising from ownership or operation of the Purchased Assets after the Closing
- All environmental liabilities relating to the Purchased Assets, whether arising before, on or after the Closing
- Priming Taxes (defined as unpaid taxes on the Purchased Assets that cannot be discharged and must be paid to transfer the assets free and clear)
- Taxes attributable to periods beginning after the Closing
Notably, the Excluded Liabilities that Purchaser will not assume include:
- Claims for bodily injury, death or property loss prior to the Effective Time
- Contamination from offsite disposal prior to the Effective Time
- Pre-Effective Time legal proceedings
- Pre-Effective Time violations, fines, or penalties
- Pre-Effective Time royalty payment issues
- Pre-closing tax liabilities
- Employee liabilities
- Bankruptcy administrative expenses
- Cure Costs under Section 365
Employment Impact
The motion emphasizes the employment consequences of the transaction. According to the filing, "The Buyer intends to continue the operation of the Purchased Assets, which would allow over two hundred (200) workers in the area to maintain their employment."
The motion notes that "Upon information and belief, CCE employs the largest workforce in Johnson County, Wyoming."
The alternative to approving the sale would be severe: "If the Debtors are unable to close the Sale Transaction, the Debtors will be required to convert their chapter 11 cases to chapter 7, which will likely result in the winding down of the US Realm's business and require the shutting in of the Gas Wells (which cannot be reversed and will not only remove any value from the estates, but will also increase the claims of various creditors) and the loss of numerous jobs in the surrounding area where the Debtors operate."
Business Judgment for Sale Approval
The debtors argue that the sale satisfies the business judgment standard. The motion states: "Based on the results of its analysis of the Debtors' ongoing and future business prospects, the CRO, in conjunction with the Debtors' professionals, concluded a sale as a going concern in accordance with the APA is the best method to maximize the value of the Debtors' assets by transferring liabilities, eliminating ongoing costs and administrative expenses, minimizing or otherwise resolving claims, preserving and maintaining (i) royalty payments to holders of royalty interests and (ii) substantial tax payments to governmental entities, and addressing environmental issues for the benefit of its estate and creditors."
The motion further argues: "While the Purchased Assets were not subject to a bidding process, the US Realm Bankruptcy Case has been pending for six years and the Purchased Assets have been extensively exposed to the market. US Realm's post-petition marketing efforts provided a sufficient opportunity to generate potential bids and maximize recovery for the Debtors' creditors. However, there were no such other offers, and the APA represents the highest and best offer received by the Debtors."
Free and Clear Sale Requirements
The debtors seek approval to sell the assets free and clear of all liens, claims, rights, encumbrances and other interests under Section 363(f) of the Bankruptcy Code. The motion argues that the sale satisfies the requirements because:
- Many creditors have consented to the sale via the Sale Support Agreement (satisfying Section 363(f)(2))
- Interests in dispute satisfy Section 363(f)(4)
- Non-objecting parties are deemed to consent to the sale
- Liens, claims and interests will attach to sale proceeds
Regarding disputed interests, the motion specifically addresses Johnson County, Wyoming: "Specifically with respect to the claims of Johnson County, Wyoming ('Johnson County'), as evidenced by the adversary proceeding pending before this Court styled US Realm Powder River, LLC f/k/a Moriah Powder River, LLC v. Johnson County, Wyoming, Case No. 21-02016 and other facts, the nature and amount of Johnson County's alleged interest in the Purchased Assets, if any, and any of the Debtors' other assets, is disputed."
However, the motion also states: "Regardless, upon the best information and belief, the Buyer and Johnson County have negotiated a go-forward contractual arrangement that resolves Johnson County's pre- and post-petition claims such that it is anticipated that Johnson County supports the sale to the Buyer."
Complex Conditions Precedent
The Asset Purchase Agreement contains numerous conditions that must be satisfied before closing, including:
- RI Oil and Gas Royalty LLC must execute a contract providing $5,000,000 financing in consideration of a 2% overriding royalty interest on all wells
- Anadarko E&P Onshore LLC must execute a contract providing funding for specified plugging, abandonment, and reclamation activities with respect to legacy AEP property interests
- Devon Energy Company, L.P. must execute a contract providing funding for specified plugging, abandonment and reclamation activities with respect to legacy Devon property interests
- Kodiak Gas Services, LLC must execute a contract for gas compression and related services
- Purchaser and Johnson County must enter into an agreement for release of all tax and related claims
- Fort Union Gas Gathering, L.L.C. and Thunder Creek Gas Services, LLC must execute gathering services contracts
- Wood Group USA, Inc. must execute a contract with Purchaser
- The Purchased Assets must be sold free and clear of all encumbrances under Section 363(f)
- The Bankruptcy Court must approve assumption and assignment of contracts
- Purchaser must obtain all necessary licensing, permitting and regulatory requirements
- Purchaser must obtain all bonding required for operations
- No Seller Material Adverse Effect shall have occurred
Good Faith Purchaser Status
The debtors seek a finding that Pronghorn is a good faith purchaser entitled to protections under Section 363(m) of the Bankruptcy Code. The motion states: "The Debtors submit, and testimony presented at the Sale Hearing will demonstrate, the Purchased Assets were robustly marketed, the terms and conditions of the Sale Transaction and the sale of the Purchased Assets to the Buyer were negotiated by the Debtors and the Buyer at arm's length and in good faith with the assistance of their respective counsel and professional advisors, and that the Debtors and the Buyer did not engage in any conduct that would cause or permit the Sale Transaction to be avoided under § 363(n)."
Proposed Timeline
The debtors have proposed the following schedule:
- November 18, 2025: Service of Sale Motion Notice
- November 20, 2025: Service of Cure Notice
- December 8, 2025: Assignability Objection Deadline
- December 12, 2025: Sale Objection Deadline
- December 22, 2025, 9:00 a.m. Mountain Time: Sale Hearing
The motion states: "Any objections to the approval of the proposed Sale Transaction, including the terms contained in this Sale Motion and the proposed Sale Order, must be filed with the Court and served so as to be received by the Objection Notice Parties on or before December 12, 2025."
The hearing will take place at the United States Bankruptcy Courthouse, 2120 Capitol Avenue, 8th Floor, Cheyenne, Wyoming. However, "if no Assignability Objections or Sale Objections are filed, the Court may enter the Sale Order without a hearing."
Required Sale Order Provisions
The motion emphasizes that the Sale Order must be a Final Order providing, among other things:
- The Purchased Assets will be transferred free and clear of all Encumbrances (other than Encumbrances created by Purchaser and Permitted Exceptions) and Claims under Section 363(f)
- Purchaser has acted in "good faith" within the meaning of Section 363(m) and is entitled to the protections in Section 363(m)
- The Agreement was negotiated, proposed and entered into without collusion, in good faith and from arm's length bargaining positions and is not subject to avoidance under Section 363(n)
- The Bankruptcy Court will retain jurisdiction to resolve any controversy or claim arising out of or relating to the Agreement
- The Agreement and the Transactions may be specifically enforced against, and are not subject to rejection or avoidance by, Seller or any trustee
Importantly, the motion requests that "the Sale Order and this Agreement shall survive and remain in enforceable in the event an order is entered in the Bankruptcy Case affecting the proceedings, including, but not limited to, any order (a) converting the Bankruptcy Case to a chapter 7, (b) dismissing the Bankruptcy Case, (c) appointing a chapter 11 trustee, or (d) confirming a chapter 11 plan."
Conclusion
The motion presents the sale as representing "the highest and best offer for the Purchased Assets" and states it "is the product of reasonable efforts by the Debtors and its professionals to market and maximize the value of the Purchased Assets and to identify all available reasonable alternatives."
The debtors emphasize: "US Realm, with the assistance of its CRO and professionals, determined that a more viable alternative to the Sale Transaction does not exist."
With the December 22, 2025 hearing date set, the Bankruptcy Court will soon determine whether to approve this transaction that combines a nominal $300 purchase price with the assumption of significant liabilities and the waiver of more than $150 million in post-petition administrative expenses plus additional pre-petition claims through the Sale Support Agreement.
This article was prepared using Stretto Conductor, our new AI-powered assistant that's here to help. Stretto Conductor was able to create this summary of a 35 page court filing in less than a minute. Always review the underlying docket filings for accurate information. The information and responses generated by Stretto Conductor may contain errors or inaccuracies and should not be relied upon as a substitute for professional or legal advice.