EX-99.2 3 v167145_ex99-2.htm
EXHIBIT 99.2
 
TRANSMITTAL OF FINANCIAL REPORTS AND
CERTIFICATION OF COMPLIANCE WITH
UNITED STATES TRUSTEE OPERATING REQUIREMENTS FOR
THE PERIOD ENDED:  OCTOBER 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       X                  NO _____
 
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:  November 19, 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 OCTOBER 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, August 31, 2009 and September 30, 2009, one and ten months ended October 31, 2009 and balances as of July 12, 2009 (filing date), July 31, 2009, August 31, 2009, September 30, 2009 and October 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
   
MONTH
   
MONTH
   
YTD
   
MONTH
   
MONTH
 
   
07/12/09
   
07/31/09
   
Jul-09
   
Aug-09
   
Sep-09
   
Oct-09
   
Oct-09
   
Nov-09
   
Dec-09
 
REVENUES:
                                                     
Transportation
  $ 36,859     $ 57,278     $ 94,137     $ 91,636     $ 91,816     $ 91,646     $ 907,228              
Compression
    59,844       103,787       163,631       184,232       181,494       180,825       1,654,002              
Processing
    19,282       29,935       49,217       48,268       47,114       47,004       476,152              
Other income
    3,361       5,657       9,018       8,729       8,685       8,684       163,425              
3rd party transportation
    1,558       2,388       3,946       3,902       3,840       3,832       343,614              
Less: 3rd party transportation
    (1,558 )     (2,388 )     (3,946 )     (3,902 )     (3,840 )     (3,832 )     (343,614 )            
Total revenues
    119,346       196,657       316,003       332,865       329,109       328,159       3,200,807       -       -  
EXPENSES:
                                                                       
Pipeline and field operating expense
    525       1,174       1,699       700       900       500       47,520                  
Processing operating expense
    77,232       76,832       154,064       165,693       135,641       136,654       1,660,340                  
General and administrative expense
    2,611       4,387       6,998       6,933       7,131       12,826       79,332                  
Depreciation
    27,548       43,618       71,166       71,166       71,166       71,166       724,190                  
Taxes (refunds), other
    1,348       2,000       3,348       5,777       8,218       8,218       46,635                  
Total expenses
    109,264       128,011       237,275       250,269       223,056       229,364       2,558,017       -       -  
NET INCOME
  $ 10,082     $ 68,646     $ 78,728     $ 82,596       106,053       98,795     $ 642,790       -       -  
 
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     $ 2,267,209              
Accounts receivable:
                                                   
Trade
    475,818       311,050       328,037       324,192       323,585              
Members
    106,754       106,754       106,754       106,754       106,754              
Prepaid expenses
    100,894       73,344       156,874       165,028       155,388              
Total current assets
    2,545,393       2,480,685       2,689,354       2,903,182       2,852,936       -       -  
PIPELINES, PLANT AND EQUIPMENT
                                                       
Pipelines
    7,391,842       7,391,842       7,391,842       7,391,842       7,391,842                  
Plant
    948,457       948,457       948,457       948,457       948,457                  
Equipment
    2,560,696       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 )     (2,133,976 )                
Total pipelines, plant and equipment, net
    9,024,134       8,980,516       8,909,351       8,838,185       8,767,019       -       -  
TOTAL ASSETS
  $ 11,569,527     $ 11,461,201     $ 11,598,705     $ 11,741,367     $ 11,619,955     $ -     $ -  
                                                         
LIABILITIES AND MEMBERS' EQUITY
                                                       
CURRENT LIABILITIES:
                                                       
Accounts payable:
                                                       
Trade
  $ 250,950 (1)   $ 198,408     $ 124,740     $ 253,288     $ 163,034                  
Affiliates
    207,760 (1)     59,402       90,595       95,310       9,430                  
Accrued liabilities
    41,648       70,898       176,964       88,993       53,603                  
Other current liabilities
    104,197       104,197       104,197       104,197       104,197                  
Total current liabilities
    604,555       432,905       496,496       541,788       330,264       -       -  
LONG-TERM LIABILITIES:
                                                       
Deferred gain on sale of natural gas compressor equipment
    257,132       251,810       243,127       234,444       225,761                  
MEMBERS' EQUITY
                                                       
Members’ equity
    10,707,840 (1)     10,776,486       10,859,082       10,965,135       11,063,930                  
TOTAL LIABILITIES AND (DEFICIT) EQUITY
  $ 11,569,527     $ 11,461,201     $ 11,598,705     $ 11,741,367     $ 11,619,955     $ -     $ -  

(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 October 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
  $ 475,818 (1)   $ 311,050 (1)   $ 328,037 (1)   $ 324,192     $ 323,585                  
30-59 Days
    -       -       -       -       -                  
60-89 Days
    -       -       -       -       -                  
90+ Days
    106,754 (2)     106,754 (2)     106,754 (2)     106,754 (2)     106,754 (2)                
TOTAL
  $ 582,572     $ 417,804     $ 434,791     $ 430,946     $ 430,339     $ -     $ -  

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     $ 83,532                  
30-59 Days
    45,669       33,581       44,558       18,638       79,502                  
60-89 Days
    4,353       -       -       -       -                  
90+ Days
    -       -       -       -       -                  
TOTAL
  $ 250,950     $ 198,408     $ 124,740     $ 253,288     $ 163,034     $ -     $ -  

Note: This form does not include intercompany accounts payable.

(1) - Amounts represent trade accounts receivable balances as of July 12, 2009, July 13, 2009 and August 31, 2009, respectively and were erroneously excluded from the September 22, 2009 and previous Form 8-K filings.

(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 October 31, 2009
 
Case Name:  Hudson Pipeline & Processing Co., LLC
Case Number:  09-08255 (SWD)
 
                             
   
Bank:
 
Northwestern Bank
   
JPMorgan Chase
   
Charles Schwab & Co.
   
 
 
   
Purpose (Type):
 
Operating Account
   
Operating Account (DIP)
   
Investment Account
   
TOTAL
 
                             
   
Bank Balance (10/31/09)
  $ -     $ 2,294,302     $ 10,578     $ 2,304,880  
                                     
   
Add:  Deposits in Transit
            -       -       -  
                                     
   
Subtract:  Outstanding Checks
            (37,671 )     -       (37,671 )
                                     
   
Adjusted Bank Balance (10/31/09)
  $ -     $ 2,256,631     $ 10,578     $ 2,267,209  
                                     
Cash Activity Report
                               
                                     
 A  
Beginning Book Balance (9/30/09)
  $ -     $ 2,296,630     $ 10,578     $ 2,307,208  
                                     
 B  
Receipts
    -       323,913       0       323,914  
                                     
 C  
Transfers In (from other accounts)
    -       -       -       -  
                                     
 D  
Balance Available
    -       2,620,543       10,578       2,631,121  
                                     
 E  
Disbursements
    -       (363,913 )     -       (363,913 )
                                     
 F  
Transfers Out
    -       -       -       -  
                                     
 G  
Ending Book Balance (10/31/09)
  $ -     $ 2,256,631     $ 10,578     $ 2,267,209  
 
* 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
  $ 323,913  
Other Receipts
    -  
Total Receipts
  $ 323,913  
         
Disbursements
       
Operating Expenses
  $ 363,913  
Other Disbursements
    -  
Total Disbursements
  $ 363,913  
 
FORM 5
 
 
 

 
 
SCHEDULE OF IN-FORCE INSURANCE
For Month Ended October 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

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