Future uncertain for Bakken junior Mountainview Energy
Montana-based Mountainview Energy posted a series of losses in 2014 and into the first quarter of 2015 forcing the Bakken junior to restructure.
At the end of the first quarter, Mountainview reported a deficit of $76.9 million and a working capital deficit of $74.7 million. The company says its intended continuing operations depend on its ability to raise funding through credit facilities, future equity issuances and/or asset sales. In the current commodity market and uncertain financial environment, Mountainview concedes such funding “is not assured.”
In late May, the company said sharp declines in commodity prices in the second half of 2014 and through the first quarter 2015 “materially” reduced the company’s revenues and consequently impacted working capital balance as well as the company’s ability to secure further financing.
Mountainview said company management is actively pursuing strategies to address its financial situation including negotiating with creditors and asset sales. However, liens have been filed on the assets limiting proceeds from any potential sales.
The company said the financial situation casts “significant doubt” on its ability to continue as a going concern. “If the Company is unable to restructure its debt in an acceptable manner, obtain additional adequate debt or equity financing or achieve adequate proceeds from the sale of assets, the Company will pursue all other legal avenues available to it with a view to improving the Company’s financial situation in the best interests of the Company.”
In the Bakken, the company operates its 12 Gage project consisting of 13,800 net acres, 21 spacing units in the Fortuna, West Ambrose and Big Dipper fields in northwest in Divide County. According to Department of Mineral Resources information, Mountainview, operating as Mountain Divide, has nine active and five confidential wells with two others awaiting completion in those fields. In March, Mountain Divide ranked 38th among North Dakota’s Bakken producers averaging 583 barrels per day from operated, non-confidential wells according to the latest data available from DMR.
Mountainview also has interest in a number of non-operated Bakken wells. In addition, the company has oil and gas assets and operations east of the Rocky Mountain Front in northwest Montana.
- Mike Ellerd