Dear Valued Partners,
We hope this message finds you well.
We wanted to provide an update on the recent court hearing held on November 7th in the Bankruptcy Court (Eastern District of Texas). While our intention was to share a summary sooner, we awaited additional clarity on key matters before posting.
Unfortunately, due to time constraints and the volume of witnesses, our legal team couldn’t execute the planned strategy fully.
There were 2 main items that were due to be heard at court.
1. Our objection to MXP's motion to assume the operating contract and utilize cash collateral.
2. Our motion to compel MXP to comply with the agreed order for authorization to conduct the 2004 examination. This examination will encompass various facets, including a thorough investigation into accounting ledgers, systems, databases, bank accounts, and disbursements.
Regarding item 1, the judge has allowed MXP to continue operating for 60 days. The silver lining is that ASE will need to approve specific costs to maintain the Seminole County wells during this 60-day period and we will also receive full optics over OPEX.
We were granted access to visit the project and inspect the current state of the Seminole County wells and associated facilities. Senior Partners Dylan Knight and Grant McLoughlin conducted a thorough inspection and documented each well with photo and video evidence. Currently, the only well that seems to be in production is the ASE 3, which is flowing into a 500-barrel frac tank without the need for a pump jack.
In regards to item 2, there was not enough time for this to be heard, yet MXP did agree to provide invoices and financials as part of our discovery. Currently, we are still waiting for MXP to comply with the order, in response to this non-compliance, our legal team has filed a motion for MXP to comply with the order.
Additionally, we are pleased to announce that ASE has enlisted the expertise of Matt Burns, a trusted and experienced Oklahoma operator, who is conducting a comprehensive review of the information provided by MXP. Matt's focus will centre on several critical aspects:
Inflated Invoices: Examining the accuracy and validity of invoicing details provided by MXP.
Scope of Allegedly Completed Works: Assessing the actual scope and completion status of reported works.
Non-compliance with the Joint Operating Agreement (JOA): Working directly with our legal team to list the multiple non-compliance issues.
General Duties of a Licensed Operator in Oklahoma: Reviewing overall compliance and fulfillment of obligations as required by the OOC in the State of Oklahoma.
The next court hearing related to our MXP legal case is on the 12th of December, where the "United States Trustee`s motion to dismiss or convert for cause, or alternatively to establish deadlines, pursuant to 11 U.S.C 1112 (b) and 105.
On January 9th, ASE will return to court to present evidence and witness testimony against MXP.
Your steadfast support and patience are deeply appreciated. Be assured, that our unwavering commitment to pursuing justice and reclaiming control over the Seminole County wells and leases remains resolute.
Best regards,
The Alpha Seven Energy Team
