“You want to be in a position of telling buyers, ‘We don’t have to sell,’” said Dave Herman, a partner in the Gordian Group, which advised Trans Energy in its restructuring and sale.

Gordian negotiated with Trans Energy’s lenders to get time to reorganize the company before a sale.

“The problem with selling the company would have been that oil and gas companies have been sold recently for less than what their assets were worth, he said.

“We didn’t want to do that,” Herman said.

Trans Energy owned rights in Marshall, Wetzel and Marion counties, and the company had fallen on financial hard times. In its quarterly report filed with the Securities and Exchange Commission for the period ending Sept. 30 of this year, Trans Energy had assets of $79.94 million and liabilities of $149.42 million, leaving a stockholder deficit of about $71.94 million. The company reported a net loss of nearly $8 million in the quarter, compared with about $3.55 million in the third quarter of last year. Its oil and gas sales had fallen about $600,000 in the quarter.

The financials, however, did not tell the whole story of Trans Energy’s value, Herman said.

“Their assets were very strategically acquired; the team had done a very good job,” he said. “They’re local. One of the challenges was making sure bidders understood there was competition so they would pay what the assets were worth,” and not a small premium for what Trans Energy’s stock was trading for.

Before the company was sold, though, Gordian Group was working on restructuring it. Trans Energy was in default with its lender, and financial institutions were skittish about committing money to it when the energy market declined, Herman said.

So Gordian Group worked with Trans Energy’s lender over 18 months to strengthen the company, he said.

“The key is creating a competitive dynamic and/or making people think there is a competitive dynamic,” he said.

While working with lenders, Gordian Group worked on creating “a non-fire sale façade as possible,” he said. “We were able to get the lender to agree to provide us time to get the markets to turn a little bit.”

Peter Kaufman, president and head of restructuring and distressed M&A at Gordian Group, said his firm does not work for financial institutions. Instead, it works for boards of directors and shareholder interests.

“Every one of these deals that we do is a different set of circumstances and, therefore, strategy,” Kaufman said. “Our strategy here was to keep creditors at bay until the cavalry arrives.”

Gordian Group was able to get shareholders partial equality with creditors, Kaufman said, but then the offers came when Trans Energy went up for sale.

Gordian Group asked for the highest and best bids.

“One of them emerged out of the pack at an eye-popping price,” Kaufman said. “We were extremely delighted with the outcome.”

On Oct. 25, after a six-week bidding process among several prospective buyers, EQT announced it was buying Trans Energy for $3.58 per share. That was a premium of more than 250 percent over the market price of the company, according to Gordian Group.

EQT’s bid amounted to a premium of 250 percent of Trans Energy’s stock.

Trans Energy’s acreage is contiguous with acreage EQT already controlled, allowing EQT to extend laterals on gas wells it had already drilled. Trans Energy will operate as a subsidiary of EQT.

“We think that there are a lot of gas companies that are similarly situated but don’t have to get their shareholders thrown under the bus,” Kaufman said.