Three subsidiaries of US Realm Powder River LLC filed for Chapter 11 bankruptcy protection in Wyoming federal court this week, marking the latest chapter in a complex restructuring that began when the parent company sought bankruptcy protection in 2019.
Carbon Creek Energy LLC, Powder River Midstream LLC, and US Realm Wyoming Ranches LLC filed their petitions on September 8, 2025, in the U.S. Bankruptcy Court for the District of Wyoming. The filings were specifically designed to facilitate a pending asset sale to Pronghorn Resources LLC, according to court documents filed September 12.
The subsidiary bankruptcies represent an unusual corporate restructuring strategy for the natural gas company, which operates approximately 6,800 coal-bed methane wells in Wyoming's Powder River Basin and holds mineral leases covering more than 1 million acres. While US Realm owns the mineral assets, it has no employees and relies entirely on its subsidiaries to operate the wells and bring gas to market.
Background of Complex Corporate Structure
US Realm initially filed for Chapter 11 protection on October 31, 2019, and has been operating under court supervision for nearly six years. Mark Welch, a principal at MorrisAnderson & Associates Ltd. (now part of J.S. Held LLC), was appointed as Chief Restructuring Officer in March 2021 with expanded powers to oversee potential asset sales.
The corporate structure became more integrated over time, with US Realm acquiring 100% ownership of Carbon Creek Energy and Powder River Midstream in February 2024, and later acquiring US Realm Wyoming Ranches in February 2025. Carbon Creek Energy serves as the contract operator of the gas wells under a management services agreement, while Powder River Midstream provides pipeline assets and compression services. Wyoming Ranches owns real estate used for operations.
"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," Welch stated in his declaration supporting the bankruptcy filings.
Asset Sale Drives Strategic Filings
The subsidiary bankruptcies were prompted by negotiations with Pronghorn Resources LLC for the purchase of US Realm's mineral assets. According to court filings, the asset purchase agreement requires the three subsidiaries to file their own Chapter 11 cases as a condition of the proposed transaction.
Welch noted in his declaration that after US Realm "had been operating as a debtor in possession for nearly five years, US Realm was approached by Pronghorn Resources, LLC regarding a potential transaction involving the sale of the Mineral Assets." The parties reached agreement on the asset purchase agreement after "months of arm's length negotiations between US Realm, Pronghorn, and a number of US Realm's creditors."
The bankruptcy court entered an order on September 11, 2025, directing joint administration of the related Chapter 11 cases under US Realm's original case number 19-20699.
Operational Continuity Requests
The three subsidiaries filed several "first day" motions seeking court approval to maintain critical business operations during the bankruptcy proceedings. These include requests to:
- Continue utility services from Powder River Energy Corporation and Rocky Mountain Power, with Carbon Creek Energy holding a $3.1 million utility deposit with PRECorp
- Maintain an integrated cash management system across multiple bank accounts at Bank of America and BOKF
- Pay approximately $36,402.49 in accrued employee wages for 11 workers, plus health benefits and payroll taxes
- Continue insurance coverage with annual premiums of approximately $546,558 and maintain 267 surety bonds totaling $32 million
Carbon Creek Energy's monthly utility costs are estimated at approximately $1.3 million for PRECorp services and $26,000 for Rocky Mountain Power, while Powder River Midstream faces approximately $11,000 monthly in PRECorp charges.
Financial and Operational Impact
The filings reveal the integrated nature of the companies' operations and financial systems. All revenue from natural gas production flows to US Realm's debtor-in-possession account, then is transferred to subsidiary accounts for operating expenses, royalty payments, and payroll.
Carbon Creek Energy employs 11 people, with six providing back-office accounting support from Denver for five field employees in Wyoming. The company pays employees twice monthly and faces immediate obligations for wages earned between September 1-8, 2025.
The companies maintain extensive insurance and bonding requirements due to regulatory obligations in the oil and gas industry. Annual surety bond premiums total approximately $1.8 million, securing obligations related to environmental reclamation, surface damage, and federal land operations.
Strategic Significance
The coordinated bankruptcy filings represent a sophisticated approach to facilitating the asset sale while maintaining operational continuity. By bringing all operating entities under bankruptcy court protection, the companies can potentially provide Pronghorn Resources with a cleaner acquisition structure while protecting stakeholder interests.
The cases are being jointly administered in the U.S. Bankruptcy Court for the District of Wyoming under case numbers 19-20699 (US Realm), 25-20387 (Carbon Creek Energy), 25-20388 (Powder River Midstream), and 25-20389 (US Realm Wyoming Ranches).
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 37 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.