Private equity firm seeks to cut price for failed shale producer

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HOUSTON, April 2 (Reuters) - A U.S. bankruptcy court sent a private equity firm back to negotiate with creditors on Thursday after itproposed to cut nearly a third off its $320 million deal for failed Oklahoma shale firm Alta Mesa Resources.

Creditors earlier this year agreed to sell the company to Bayou City Energy Management and Mach Resources, a company founded by U.S. shale pioneer Tom Ward. That deal fell apart when the two were unable to close financing from Swiss financial group UBS.

The revised proposal is based on U.S. oil selling at $23 a barrel, according to attorney Caroline Reckler, who asked the court to lock in the $220 million revised purchase price and drop other claims against the buyers.

The new offer is "very close" to being accepted, she said.

However, an attorney for the creditors asked for more time to negotiate and not drop claims against the buyers until creditors were satisfied with the new offer.

"There are red flags in what we've seen" from the latest proposal, said Brown Rudnick attorney Michael Winograd. He said creditors were seeking additional "downside protection" in the offer.

There were eight or nine other indications of interest in Alta Mesa assets, he said.

The $220 million purchase price would adjust by $2.5 million for every $1 per barrel change in the price of oil, and could range between $200 million and $240 million, Reckler said.

A hearing is scheduled for April 8 if the two sides reach an agreement by midnight April 2. If none is concluded, the court will consider breach of contract claims, U.S. Bankruptcy Judge Marvin Isgur said.

(Reporting by Gary McWilliams; Editing by Dan Grebler)

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