EX-99.2 3 v163310_ex99-2.htm Unassociated Document
EXHIBIT 99.2

TRANSMITTAL OF FINANCIAL REPORTS AND
CERTIFICATION OF COMPLIANCE WITH
UNITED STATES TRUSTEE OPERATING REQUIREMENTS FOR
THE PERIOD ENDED:  SEPTEMBER 30, 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:  October 20, 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 SEPTEMBER 30, 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 and August 31, 2009, one and nine months ended September 30, 2009 and balances as of July 12, 2009 (filing date), July 31, 2009, August 31, 2009 and September 30, 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
    
MONTH
    
YTD
    
MONTH
    
MONTH
    
MONTH
  
   
07/12/09
    
07/31/09
    
Jul-09
    
Aug-09
    
Sep-09
    
Sep-09
    
Oct-09
    
Nov-09
    
Dec-09
  
REVENUES:
                                                      
Transportation
   $ 36,859     $ 57,278     $ 94,137     $ 91,636     $ 91,816     $ 815,582                    
Compression
     59,844       103,787       163,631       184,232       181,494       1,473,177                    
Processing
     19,282       29,935       49,217       48,268       47,114       429,148                    
Other income
     3,361       5,657       9,018       8,729       8,685       154,741                    
3rd party transportation
     1,558       2,388       3,946       3,902       3,840       339,782                    
Less: 3rd party transportation
     (1,558 )     (2,388 )     (3,946 )     (3,902 )     (3,840 )     (339,782 )                  
Total revenues
     119,346       196,657       316,003       332,865       329,109       2,872,648       -       -       -  
EXPENSES:
                                                                        
Pipeline and field operating expense
     525       1,174       1,699       700       900       47,020                          
Processing operating expense
     77,232       76,832       154,064       165,693       135,641       1,523,686                          
General and administrative expense
     2,611       4,387       6,998       6,933       7,131       66,506                          
Depreciation
     27,548       43,618       71,166       71,166       71,166       653,024                          
Taxes (refunds), other
     1,348       2,000       3,348       5,777       8,218       38,417                          
Total expenses
     109,264       128,011       237,275       250,269       223,056       2,328,653       -       -       -  
NET INCOME
   $ 10,082     $ 68,646     $ 78,728     $ 82,596       106,053     $ 543,995       -       -       -  
 
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     $ 2,307,208                    
Accounts receivable:
                                                  
Trade
     475,818       311,050       328,037       324,192                    
Members
     106,754       106,754       106,754       106,754                    
Prepaid expenses
     100,894       73,344       156,874       165,028                    
Total current assets
     2,545,393       2,480,685       2,689,354       2,903,182       -       -       -  
PIPELINES, PLANT AND EQUIPMENT
                                                        
Pipelines
     7,391,842       7,391,842       7,391,842       7,391,842                          
Plant
     948,457       948,457       948,457       948,457                          
Equipment
     2,560,696       2,560,696       2,560,696       2,560,696                          
Less: accumulated depreciation
     (1,876,861 )     (1,920,479 )     (1,991,644 )     (2,062,810 )                        
Total pipelines, plant and equipment, net
     9,024,134       8,980,516       8,909,351       8,838,185       -       -       -  
TOTAL ASSETS
   $ 11,569,527     $ 11,461,201     $ 11,598,705     $ 11,741,367     $ -     $ -     $ -  
                                                         
LIABILITIES AND MEMBERS' EQUITY
                                                        
CURRENT LIABILITIES:
                                                        
Accounts payable:
                                                        
Trade
   $ 250,950 (1)   $ 198,408     $ 124,740     $ 253,288                          
Affiliates
     207,760 (1)      59,402       90,595       95,310                          
Accrued liabilities
     41,648       70,898       176,964       88,993                          
Other current liabilities
     104,197       104,197       104,197       104,197                          
Total current liabilities
     604,555       432,905       496,496       541,788       -       -       -  
LONG-TERM LIABILITIES:
                                                        
Deferred gain on sale of natural gas compressor equipment
     257,132       251,810       243,127       234,444                          
MEMBERS' EQUITY
                                                        
Members’ equity
     10,707,840 (1)     10,776,486       10,859,082       10,965,135                          
TOTAL LIABILITIES AND (DEFICIT) EQUITY
   $ 11,569,527     $ 11,461,201     $ 11,598,705     $ 11,741,367     $ -     $ -     $ -  
 
(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 September 30, 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
   $ 475,818 (1)   $ 311,050 (1)   $ 328,037 (1)   $ 324,192                    
30-59 Days
     -       -       -       -                    
60-89 Days
     -       -       -       -                    
90+ Days
     106,754 (2)     106,754 (2)     106,754 (2)     106,754 (2)                  
TOTAL
   $ 582,572     $ 417,804     $ 434,791     $ 430,946     $ -     $ -     $ -  
                                                         
                                                         
 
  
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     $ 234,650                          
30-59 Days
     45,669       33,581       44,558       18,638                          
60-89 Days
     4,353       -       -       -                          
90+ Days
     -       -       -       -                          
TOTAL
   $ 250,950     $ 198,408     $ 124,740     $ 253,288     $ -     $ -     $ -  
 
Note: This form does not include intercompany accounts payable.
                            
                             
(1) - Amounts were adjusted from the September 22, 2009 Form 8-K and previous filings to include trade accounts receivable balances.
                             
(2) - 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 September 30, 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 (9/30/09)
   $ -     $ 2,325,441     $ 10,578     $ 2,336,019  
                                     
   
Add:  Deposits in Transit
             -       -       -  
                                     
   
Subtract:  Outstanding Checks
             (28,811 )     -       (28,811 )
                                     
   
Adjusted Bank Balance (9/30/09)
   $ -     $ 2,296,630     $ 10,578     $ 2,307,208  
                                     
Cash Activity Report
                                
                                     
  A  
Beginning Book Balance (8/31/09)
   $ -     $ 2,087,113     $ 10,575     $ 2,097,689  
                                       
  B  
Receipts
     -       328,109       2       328,112  
                                       
  C  
Transfers In (from other accounts)
     -       -       -       -  
                                       
  D  
Balance Available
     -       2,415,223       10,578       2,425,800  
                                       
  E  
Disbursements
     -       (118,592 )     -       (118,592 )
                                       
  F  
Transfers Out
     -       -       -       -  
                                       
  G  
Ending Book Balance (9/30/09)
   $ -     $ 2,296,630     $ 10,578     $ 2,307,208  
                                       
* 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
   $ 328,109  
Other Receipts
     2  
Total Receipts
   $ 328,112  
         
Disbursements
        
Operating Expenses
   $ 118,592  
Other Disbursements
     -  
Total Disbursements
   $ 118,592  
 
FORM 5
 
SCHEDULE OF IN-FORCE INSURANCE
For Month Ended September 30, 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
      
               
Note:  Hudson Pipeline & Processing Co., LLC affirms that all necessary insurance coverages are in effect and all premium payments are current as of the ending date specified above.
 
 
FORM 7