UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 13D

Under the Securities Exchange Act of 1934

(Amendment No. 2)*¹

 

 

SANDRIDGE PERMIAN TRUST

(Name of Issuer)

Common Units of Beneficial Interest

(Title of Class of Securities)

80007A102

(CUSIP Number)

Stephen C. Pugh

President and Chief Executive Officer

Avalon Energy, LLC

5000 Quorum Drive, Suite 205

Dallas, Texas 75254

(212) 446-8166

Dickie D. Hunter

President

Montare Resources I, LLC

400 East Las Colinas Blvd., Suite 680

Irving, Texas 75039

(214) 676-4434

with a copy to:

 

W. Phillip Whitcomb, Esq. Munsch Hardt Kopf & Harr, P.C. 500 N. Akard Street #3800 Dallas, Texas 75201 (214) 855-7556		Janice V. Sharry, Esq. Haynes and Boone, LLP 2323 Victory Avenue, Suite 700 Dallas, Texas 75219 (214) 651-5000

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

August 27, 2020

(Date of Event which Requires Filing of this Statement)

 

 

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box.  ☐

 

 

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.

 

 

 

*	The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

 

 

1	This filing constitutes Amendment No. 2 for Avalon Energy, LLC, and Amendment No.1 for Montare Resources I, LLC.

 

 

 

CUSIP No. 80007A102

 

1.		Names of Reporting Persons   Avalon Energy, LLC
2.		Check the Appropriate Box if a Member of a Group (See Instructions) (a)  ☐        (b)  ☒
3.		SEC Use Only
4.		Source of Funds (See Instructions)   WC; BK
5.		Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)  ☐
6.		Citizenship or Place of Organization   Texas
Number of Shares Beneficially Owned by Each Reporting Person With				7.		Sole Voting Power   13,125,000
				8.		Shared Voting Power   0
				9.		Sole Dispositive Power   13,125,000
				10.		Shared Dispositive Power   0
11.		Aggregate Amount Beneficially Owned by Each Reporting Person   13,125,000
12.		Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)   ☐
13.		Percent of Class Represented by Amount in Row (11)   25.00%
14.		Type of Reporting Person (See Instructions)   OO

This Amendment to Schedule 13D (as amended, this “Schedule 13D”) relates to Common Units of Beneficial Interest (“Common Units”) of SandRidge Permian Trust, a Delaware statutory trust (the “Issuer”). This Schedule 13D amends the Schedule 13D previously filed with the Securities and Exchange Commission (the “Commission”) by Avalon Energy, LLC and Montare Resources I, LLC, by furnishing the information set forth below. Except as otherwise specified in this Schedule 13D, all previous Items of the Schedule 13D previously filed with the Commission are unchanged. Capitalized terms used herein which are not defined herein have the meanings given to them in the Schedule 13D previously filed with the Commission.

 

Item 4.

Purpose of Transaction

Item 4 is hereby amended and supplemented by adding the following:

“On August 25, 2020, PEDEVCO Corp. (NYSE American: PED) (“PEDEVCO”) sent Avalon Energy an unsolicited non-binding indication of interest (the “PEDEVCO Offer”) to purchase all of the assets of Avalon Energy, including the Common Units owned by Avalon Energy (the “Avalon Assets”). On August 27, 2020, Avalon Energy sent a letter to PEDEVCO (the “Response Letter”) rejecting the PEDEVCO Offer and informing PEDEVCO that Avalon Energy has granted exclusivity to Montare, and accordingly is not permitted to engage in any discussions with any other party concerning the Avalon Assets. This description of the Response Letter is qualified in its entirety by reference to the full text of the Response Letter, which is attached hereto as Exhibit 99.3 and incorporated by reference herein.”

 

Item 6.

Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer

Item 6 is hereby amended and supplemented by adding the following sentence:

“The information set forth in Item 4 of this Schedule 13D is incorporated by reference into this Item 6.”

 

Item 7.

Material to be Filed as Exhibits

Item 7 is hereby amended and supplemented as follows:

“The following exhibits are filed as exhibits hereto:

 

Exhibit		Description of Exhibit
99.3		Letter to PEDEVCO Corp., dated August 27, 2020”

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Date: August 28, 2020

 

EXHIBIT INDEX

 

Exhibit		Description of Exhibit
99.3		Letter to PEDEVCO Corp., dated August 27, 2020 (filed herewith)

Exhibit 99.3

 

Via e-mail

August 27, 2020

J. Douglas Schick

President

PEDEVCO Corp.

Energy Center II

575 N. Dairy Ashford

Suite 210

Houston, Texas 77079

Dear Mr. Schick:

This letter is written in response to your recent communication to the Board of Directors of Avalon Energy, LLC (“Avalon Energy”) dated August 25, 2020 regarding an unsolicited revised offer to purchase all of the assets of Avalon Energy, including the common units of SandRidge Permian Trust (“PER”) held by Avalon Energy (collectively, the “Avalon Assets”). This communication follows the delivery of (1) a presentation outlining a proposed purchase of the Avalon Assets (the “PEDEVCO Presentation”) on or about May 15, 2020 and (2) an undated letter from you, in your capacity as President of PEDEVCO Corp., indicating an interest in acquiring the Avalon Assets delivered to members of Avalon Energy on July 3, 2020 by members of the Board of Managers of Avalon Energy (collectively, the “Initial Indications of Interest”).

After duly-called joint meetings of the Board of Managers of Avalon Energy and Avalon Exploration and Production LLC (“Avalon E&P”), the parent company of Avalon Energy, held on May 18, 2020 (which meeting included a conference call with you and the members of the Board of Managers regarding the presentation, which contained confidential, non-public information regarding the operations of Avalon Energy), July 9, 2020 and July 20, 2020, the Initial Indications of Interest were rejected by the members of the Board of Managers of both Avalon companies. On August 26, 2020, the Board of Managers of Avalon E&P met to discuss the most recent indication of interest set forth in your August 25 letter. The Board of Managers of Avalon E&P and Avalon Energy believe that the most recent non-binding PEDEVCO proposal is less favorable to the members of Avalon Energy than other proposals received by Avalon E&P and Avalon Energy. As a result, this letter is notification that your most recent indication of interest is also rejected.

You should also know that Avalon E&P and its subsidiaries, including Avalon Energy (the “Avalon Entities”), entered into a letter agreement with an affiliate of Montare Resources, LLC on July 30, 2020 granting exclusive negotiating rights to Montare Resources, LLC with respect to the purchase of the Avalon Assets and discussions with PER. These negotiations led to the execution of the agreement referenced in the attached press release by all Avalon Entities, which includes

an exclusivity provision that does not permit discussions with any other party concerning the Avalon Assets. As a result, Avalon will not entertain any further communications with PEDEVCO and would expect that PEDEVCO will not have further communication with any member of Avalon E&P or Avalon Energy or any prior or current managers of Avalon E&P or Avalon Energy.

We note that you have non-public, confidential information with respect to the operations of Avalon Energy and demand that such information be returned to Avalon Energy or, alternatively, deliver the certificate of an executive officer of PEDEVCO certifying that all such information has been destroyed within five (5) business days. You are hereby notified that the use of such non-public, confidential information for any purpose other than an evaluation of a possible purchase of the Avalon Assets and any further communication with members of Avalon’s management will be deemed interference with the ongoing business of the Avalon Entities.

Regards,

/s/ Steven C. Pugh

Stephen C. Pugh,

CEO and President -

Avalon Exploration and Production LLC and

Avalon Energy, LLC

 

cc:	Clark R. Moore, General Counsel of PEDEVCO

Montare Resources, LLC

Haynes and Boone, LLP

Munsch Hardt Kopf & Harr, P.C.