EX-99.2 3 v160871_ex99-2.htm
EXHIBIT 99.2

TRANSMITTAL OF FINANCIAL REPORTS AND
CERTIFICATION OF COMPLIANCE WITH
UNITED STATES TRUSTEE OPERATING REQUIREMENTS FOR
THE PERIOD ENDED:  AUGUST 31, 2009


IN RE:
:
CASE NO.:
09-08255 (SWD)
 
:
Chapter 11
  
HUDSON PIPELINE & PROCESSING CO., LLC,
:
Judge:
Honorable Scott W. Dales
Debtor.
:
    

As debtor in possession, I affirm:

1.           That I have reviewed the financial statements attached hereto, consisting of:
 
 
X
  
Operating Statement
(Form 2)
 
X
  
Balance Sheet
(Form 3)
 
X
  
Summary of Operations
(Form 4)
 
X
  
Monthly Cash Statement
(Form 5)
 
N/A
  
Statement of Compensation
(Form 6)
 
X
  
Schedule of In-Force Insurance
(Form 7)

and that they have been prepared in accordance with normal and customary accounting practices, and fairly and accurately reflect the debtor’s financial activity for the period stated.

2.           That the insurance, including workers’ compensation and unemployment insurance, as described in Section 4 of the Reporting Requirements for Chapter 11 Cases is in effect.  (If not, attach a written explanation.)YES X  NO _____

3.           That all postpetition taxes as described in Sections 1 and 14 of the Operating Instructions and Reporting Requirements For Chapter 11 cases are current.  (If not, attach a written explanation.)
YES _____                      NO _____                      N/A X

4.           No professional fees (attorney, accountant, etc.) have been paid without specific court authorization.  (If not, attached a written explanation.)
YES X                                NO _____

5.           All United States Trustee Quarterly fees have been paid and are current.
YES _____                      NO _____                      N/A X

6.           Have you filed your prepetition tax returns.  (If not, attach a written explanation.)
YES X                                No _____

I hereby certify, under penalty of perjury, that the information provided above and in the attached documents is true and correct to the best of my information and belief.



Dated:  September 17, 2009
/s/ Sanford R. Edlein
 
Debtor in Possession
       
 
Chief Restructuring Officer
  
(231) 941-0073
 
Title
  
Phone
 
FORM 1
 
HUDSON PIPELINE & PROCESSING CO, LLC (“HPPC”)
EXPLANATORY NOTES TO THE MONTHLY OPERATING REPORT
DATED AS OF AUGUST 31, 2009

1.  
This Monthly Operating Report (“MOR”) has been signed by the Company’s Chief Restructuring Officer, Sanford R. Edlein.  The MOR was prepared by Aurora Oil & Gas Corporation’s (the “Company”) staff with management oversight on behalf of HPPC.  Mr. Edlein does not have personal knowledge of every item identified in the MOR and has relied upon the work of Company management.  In reviewing and signing the MOR, Mr. Edlein has relied upon the accuracy and integrity of the Company’s books and records, and it is possible that further review thereof may require amendment of the MOR.

2.  
This MOR is preliminary and unaudited and reflects results for the twelve days ended July 12, 2009 (pre-petition), nineteen days ended July 31, 2009 (post-petition), one month ended July 31, 2009, one and eight months ended August 31, 2009 and balances as of July 12, 2009 (filing date), July 31, 2009 and August 31, 2009.  This MOR should be read together and concurrently with the Company’s first quarter 2009 Form 10-Q that was filed with the Securities and Exchange Commission (“SEC”) on May 8, 2009 and the Company’s Annual Report on Form 10-K for fiscal 2008 filed with the SEC on March 13, 2009 for a comprehensive description of our current financial condition and operating results. This MOR should also be read together and concurrently with Forms 8-K filed with the SEC during 2009.  This MOR is being provided to the Bankruptcy Court and the U.S. Trustee.

3.  
This MOR is unaudited and will not be subject to audit or review by our external auditors on a stand-alone basis at any time in the future.  Results for this period as presented in the MOR are not necessarily indicative of the actual results for the period if all such matters were allocated to all periods in the quarter or year.  Accordingly, each period reported in the MOR should not be viewed on a stand-alone basis, but rather in the context of previously reported financial results, including the Company’s SEC filings.

4.  
This MOR is presented in a format providing information required under local rules and incorporating measurements used for internal operating purposes, rather than in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. This MOR does not include certain financial statements and explanatory footnotes, including disclosures required under GAAP.

5.  
This MOR is presented on a stand alone basis for HPPC and does not include any eliminating entries.  HPPC is a limited liability company that owns and operates various pipelines and processing facilities located in Hudson Township area of the Michigan Antrim play.  The Company holds a 96.1% interest in HPPC.
 
CASE NAME:  Hudson Pipeline & Processing Co., LLC
CASE NUMBER:  09-08254 (SWD)
   
OPERATING STATEMENTS
   
PERIOD
    
PERIOD
                                            
   
07/01/09 -
    
07/13/09 -
    
MONTH
    
MONTH
    
YTD
    
MONTH
    
MONTH
    
MONTH
    
MONTH
  
   
07/12/09
    
07/31/09
    
Jul-09
    
Aug-09
    
Aug-09
    
Sep-09
    
Oct-09
    
Nov-09
    
Dec-09
  
REVENUES:
                                                      
Transportation
   $ 36,859     $ 57,278     $ 94,137     $ 91,636     $ 723,766                          
Compression
     59,844       103,787       163,631       184,232       1,291,683                          
Processing
     19,282       29,935       49,217       48,268       382,034                          
Other income
     3,361       5,657       9,018       8,729       146,056                          
3rd party transportation
     1,558       2,388       3,946       3,902       335,942                          
Less: 3rd party transportation
     (1,558 )     (2,388 )     (3,946 )     (3,902 )     (335,942 )                        
Total revenues
     119,346       196,657       316,003       332,865       2,543,539       -       -       -       -  
EXPENSES:
                                                                        
Pipeline and field operating expense
     525       1,174       1,699       700       46,120                                  
Processing operating expense
     77,232       76,832       154,064       165,693       1,388,045                                  
General and administrative expense
     2,611       4,387       6,998       6,933       59,375                                  
Depreciation
     27,548       43,618       71,166       71,166       581,858                                  
Taxes (refunds), other
     1,348       2,000       3,348       5,777       30,199                                  
Total expenses
     109,264       128,011       237,275       250,269       2,105,597       -       -       -       -  
NET INCOME
   $ 10,082     $ 68,646     $ 78,728     $ 82,596     $ 437,942       -       -       -       -  
 
FORM 2
CASE NAME:  Hudson Pipeline & Processing Co., LLC
                        
CASE NUMBER:  09-08254 (SWD)
                            
 
                                           
BALANCE SHEETS
                                          
   
Filing Date
    
AS OF
    
AS OF
    
AS OF
    
AS OF
    
AS OF
    
AS OF
  
   
07/12/09
    
07/31/09
    
08/31/09
    
09/30/09
    
10/31/09
    
11/30/09
    
12/31/09
  
ASSETS
                                          
CURRENT ASSETS:
                                          
Cash
   $ 1,861,927     $ 1,989,537     $ 2,097,689                          
Accounts receivable:
                                                
Trade
     475,818       311,050       328,037                          
Members
     106,754       106,754       106,754                          
Prepaid expenses
     100,894       73,344       156,874                          
Total current assets
     2,545,393       2,480,685       2,689,354       -       -       -       -  
PIPELINES, PLANT AND EQUIPMENT
                                                        
Pipelines
     7,391,842       7,391,842       7,391,842                                  
Plant
     948,457       948,457       948,457                                  
Equipment
     2,560,696       2,560,696       2,560,696                                  
Less: accumulated depreciation
     (1,876,861 )     (1,920,479 )     (1,991,644 )                                
Total pipelines, plant and equipment, net
     9,024,134       8,980,516       8,909,351       -       -       -       -  
TOTAL ASSETS
   $ 11,569,527     $ 11,461,201     $ 11,598,705     $ -     $ -     $ -     $ -  
                                                         
LIABILITIES AND MEMBERS' EQUITY
                                                        
CURRENT LIABILITIES:
                                                        
Accounts payable:
                                                        
Trade
   $ 250,950 (1)   $ 198,408     $ 124,740                                  
Affiliates
     207,760 (1)      59,402       90,595                                  
Accrued liabilities
     41,648       70,898       176,964                                  
Other current liabilities
     104,197       104,197       104,197                                  
Total current liabilities
     604,555       432,905       496,496       -       -       -       -  
LONG-TERM LIABILITIES:
                                                        
Deferred gain on sale of natural gas compressor equipment
     257,132       251,810       243,127                                  
MEMBERS' EQUITY
                                                        
Members’ equity
     10,707,840 (1)     10,776,486       10,859,082                                  
TOTAL LIABILITIES AND (DEFICIT) EQUITY
   $ 11,569,527     $ 11,461,201     $ 11,598,705       -       -       -       -  
 
                                                         
(1) - Trade accounts payable and members' equity were reduced by $45,327 and $273, respectively and affiliates accounts payable was increase by $45,600 from the informal report submitted to the U.S. Trustee as a result of adjustments to estimated accrued liabilities and to properly account for payables to affiliates.
  
 
                                  
 
FORM 3
 
CASE NAME:  Hudson Pipeline & Processing Co., LLC
                                          
CASE NUMBER: 09-08254 (SWD)
                                          
                                           
 
  
SUMMARY OF OPERATIONS
                                           
 
   SCHEDULE OF POST-PETITION TAXES PAYABLE
   
Filing Date
    
AS OF
    
AS OF
    
AS OF
    
AS OF
    
AS OF
    
AS OF
  
   
07/12/09
    
07/31/09
    
08/31/09
    
09/30/09
    
10/31/09
    
11/30/09
    
12/31/09
  
                                           
INCOME TAXES WITHHELD:
                                          
Federal
   $ -     $ -     $ -                          
State
     -       -       -                          
Local
     -       -       -                          
FICA WITHHELD
     -       -       -                          
EMPLOYERS FICA
     -       -       -                          
UNEMPLOYMENT TAX:
                                                
Federal
     -       -       -                          
State
     -       -       -                          
SEVERANCE TAXES
     -       -       -                          
PROPERTY TAXES
     -       -       -                          
STATE INCOME TAXES
     -       -       -                          
WORKERS' COMPENSATION
     -       -       -                          
TOTAL POST-PETITION TAXES PAYABLE
   $ -     $ -     $ -     $ -     $ -     $ -     $ -  
                                                         
Note: HPPC does not have employees and therefore no payroll related liabilities exists. No other tax related payables exist at August 31, 2009.
                                                         
 
  
AGING OF ACCOUNTS RECEIVABLE
   
AGED AS OF
    
AS OF
    
AS OF
    
AS OF
    
AS OF
    
AS OF
    
AS OF
  
DAYS
  
07/12/09
    
07/31/09
    
08/31/09
    
09/30/09
    
10/31/09
    
11/30/09
    
12/31/09
  
0-29 Days
   $ -     $ -     $ -                                  
30-59 Days
     -       -       -                                  
60-89 Days
     -       -       -                                  
90+ Days
     106,754 (1)     106,754 (1)     106,754 (1)                                
TOTAL
   $ 106,754     $ 106,754     $ 106,754     $ -     $ -     $ -     $ -  
                                                         
 
  
AGING OF ACCOUNTS PAYABLE
   
AGED AS OF
    
AS OF
    
AS OF
    
AS OF
    
AS OF
    
AS OF
    
AS OF
  
DAYS
  
07/12/09
    
07/31/09
    
08/31/09
    
09/30/09
    
10/31/09
    
11/30/09
    
12/31/09
  
0-29 Days
   $ 200,928     $ 164,827     $ 80,182                                  
30-59 Days
     45,669       33,581       44,558                                  
60-89 Days
     4,353       -       -                                  
90+ Days
     -       -       -                                  
TOTAL
   $ 250,950     $ 198,408     $ 124,740     $ -     $ -     $ -     $ -  
                                                         
Note: This form does not include intercompany accounts payable.
                          
                                                         
(1) - Amount is due from a member of HPPC, which can be offset against future distributions or reduction of member interest.
 
FORM 4
 
BANK RECONCILIATION AND CASH ACTIVITY REPORT
Month Ended August 31, 2009
 
                
Case Name:  Hudson Pipeline & Processing Co., LLC
            
Case Number:  09-08255 (SWD)
                
 
                             
   
Bank:
  
Northwestern Bank
    
JPMorgan Chase
Operating Account
    
Charles Schwab & Co.
        
   
Purpose (Type):
  
Operating Account
    
(DIP)
    
Investment Account
    
TOTAL
  
                             
   
Bank Balance (8/31/09)
   $ -     $ 2,129,175     $ 10,575     $ 2,139,750  
                                     
   
Add:  Deposits in Transit
     -       -       -       -  
                                     
   
Subtract:  Outstanding Checks
     -       (42,062 )     -       (42,062 )
                                     
   
Adjusted Bank Balance (8/31/09)
   $ -     $ 2,087,113     $ 10,575     $ 2,097,689  
                                     
Cash Activity Report
                                
                                     
  A  
Beginning Book Balance (7/31/09)
   $ -     $ 415,707     $ 1,573,830     $ 1,989,537  
                                       
  B  
Receipts
     -       311,049       95       311,145  
                                       
  C  
Transfers In (from other accounts)
     -       1,563,300       -       1,563,300  
                                       
  D  
Balance Available
     -       2,290,056       1,573,925       3,863,982  
                                       
  E  
Disbursements
     -       (202,943 )     (50 )     (202,993 )
                                       
  F  
Transfers Out
     -       -       (1,563,300 )     (1,563,300 )
                                       
  G  
Ending Book Balance (8/31/09)
   $ -     $ 2,087,113     $ 10,575     $ 2,097,689  
 
* A sweep account at Northwestern Bank is associated with this operating account. Effective July 20, 2009, the sweep account was closed. The presentation of this account in the reconciliation and cash activity is consolidated for these associated accounts. Also, effective July 31, 2009, this operating account was closed. No further activity will appear in this account after July 31, 2009.
  
                                       
** A predecessor account at JPMorgan Chase was established prior to the petition date of 7/12/09, in anticipation of the filing. A minimal amount of activity occurred prior to the filing date, after which the account was closed/merged into the new JPMorgan Chase DIP account. The presentation of this account in the reconciliation and cash activity is consolidated for these accounts.
  
 
Other Monies on Hand
        
         
Hudson does not keep any cash on hand.
        
         
Cash Receipts and Disbursements Detail
  
TOTAL
  
         
Receipts
        
Operated Revenues
   $ 311,049  
Other Receipts
     95  
Total Receipts
   $ 311,145  
         
Disbursements
        
Operating Expenses
   $ 202,943  
Other Disbursements
     50  
Total Disbursements
   $ 202,993  
 
FORM 5
 
SCHEDULE OF IN-FORCE INSURANCE
For Month Ended August 31, 2009
Case Name:  Hudson Pipeline & Processing Co., LLC
    
Case Number:  09-08255 (SWD)
        
         
Insurance Type
  
Carrier/Agent
  
Expiration Date
Building & Personal Property
  
Federal Insurance Company (Chubb)
  
1/1/2010
Oilfield Lease Property
  
Federal Insurance Company (Chubb)
  
1/1/2010
General Liability
  
Federal Insurance Company (Chubb)
  
1/1/2010
Pollution Liability
  
Federal Insurance Company (Chubb)
  
1/1/2010
Umbrella - Primary
  
Federal Insurance Company (Chubb)
  
1/1/2010
Umbrella - Second Layer
  
Arch Insurance Group
  
1/1/2010
Umbrella - Third Layer
  
Federal Insurance Company (Chubb)
  
1/1/2010
 
FORM 7