Teton Energy Corp. (NYSE: TEC) said it filed for Chapter 11 and intends to sell its assets through a court-approved auction to Rise Energy Partners II LLC for $18.7 million, according to Associated Press.
In a filing Sunday, Teton, the oil and gas exploration and production company, listed total assets of $24.2 million and total debt of $44.3 million.
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Under the proposed agreement, if Rise is the highest bidder in the auction, it will contribute $11.7 million in cash and $7 million in the form of a loan. In a statement released Monday, Teton said the funds will be used to pay off its creditors. Rise Energy is a Delaware limited liability company.
Teton warned that stockholders will likely get nothing, unless the company gets a significantly higher offer in the auction process.
The Denver-based company expects the confirmation of the plan of reorganization in January 2010.
Shares of Teton fell 36 percent to 20 cents per share in premarket trading.
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