Two private equity firms are buying Bakken Shale assets from another victim of the commodity price downturn.

Emerald Oil Inc. said May 25 it entered into a stalking horse asset purchase agreement with a buyer formed and owned by affiliates of Fort Worth, Texas-based Crestline Management LP and Los Angeles-based Sole Source Capital LLC.

Under the agreement, substantially all of Emerald's assets would be sold for about $73 million, roughly a quarter of what the company valued its assets at when it entered bankruptcy in March. However, the stalking horse process establishes a baseline price for the assets and allows additional bidders to offer more at auction. Emerald said its assets will be auctioned July 11 in New York.

As of March, Emerald controlled about 76,000 net acres in the Williston Basin’s McKenzie, Dunn, Billings and Stark counties, N.D. In hopes of repaying the outstanding debt on its revolving line of credit, the Denver-based company had been dealing assets since August 2015.

In October 2015, Emerald completed the sale of undeveloped acreage in North Dakota and Montana to a subsidiary of Koch Industries Inc. for $17.4 million. The deal included 30% working interest in 25,000 net acres in McKenzie County, N.D., and 4,500 net acres in Richland County, Mont.

Also in January, the company closed the sale of about 9,750 net acres of undeveloped leaseholds in Montana and North Dakota to Angelus Private Equity Group for about $9.75 million.

Emerald entered Chapter 11 protection on March 23 in the U.S. Bankruptcy Court for the District of Delaware. At the time, the company said it had executed a non-binding term sheet to sell substantially all assets to Latium Enterprises Inc., a portfolio company with assets in the U.S. and U.K.

Emerald entered bankruptcy with $291 million in total assets and $337 million in liabilities. Most of its liabilities are tied to $260.5 million in debt obligations.

The company obtained $20 million in debtor-in-possession financing, subject to bankruptcy court approval, to maintain operations during the Chapter 11 process.

Intrepid Partners LLC is Emerald's investment banker. Kirkland & Ellis LLP is its legal counsel. Opportune LLP is the company's financial adviser with Wade Stubblefield of Opportune serving as chief restructuring officer.

Emily Moser can be reached at emoser@hartenergy.com.

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