After almost a year and a half in bankruptcy reorganization, Breitburn Energy Partners LP is fielding suitors for its assets, including an unsolicited offer for its Midland Basin acreage from Diamondback Energy Inc. (NASDAQ: FANG).

In a letter filed in bankruptcy court in late September, Diamondback CEO Travis Stice offered $675 million for the company’s Midland Basin acreage. In an unusual move Oct. 3, Diamondback “bid against itself” and increased its offer for assets in Howard, Martin, Midland and Glasscock counties, Texas to $725 million, according to bankruptcy documents.

Breitburn had not responded to Diamondback’s proposal as of Oct. 5, according to court documents. Committees of unsecured debtors and equity security holders have filed motions to explore sales for some of Breitburn’s assets.

A hearing to extend Breitburn’s bankruptcy is set for Oct. 12. The company is seeking to formalize a bankruptcy plan that would offer 100% of its Permian Basin rights to unsecured bondholders in exchange for $775 million in financing, the company said in an Oct. 3 regulatory filing to the Securities and Exchange Commission.

The equity committee said the proposal would sell the assets “to a select few creditors, without competition,” according to court documents.

Including Diamondback’s proposal, Breitburn has been offered nearly $1 billion for its assets in the Permian, California and natural gas leasehold in Michigan.

In an Aug. 29 letter, Stice dangled immediate cash to Breitburn along with reasoning that a sale would ease the company’s cost of litigation and reduce its capex. Diamondback said it would become a stalking-horse bidder with the court’s approval, which would allow other companies to bid on the assets. The offer letter specified Diamondback’s interest in 17,502 net acres and assumed production of 5,500 boe/d as well as other assets.

Diamondback’s original $675 million proposal worked out to about $30,000 per undeveloped acre, Gabriele Sorbara, an analyst at The Williams Capital Group, said in an Oct. 5 report. Diamondback’s acreage has an estimated market value of about $35,800 per acre, Sorbara said.

Breitburn’s creditors put the initial offer at $39,000 per acre.

“While Diamondback may not be successful as the stalking-horse bidder, it suggests [it] remains interested in sizeable acquisitions,” Sorbara said.

Other companies, such as QEP Resources Inc. (NYSE: QEP), have also expressed interest in the acreage, he said.

The company has also received offers for its California and Michigan Antrim assets, according to bankruptcy documents.

The Michigan offer does not include Breitburn’s related oil-producing properties in Michigan and its natural gas assets in Kentucky and Indiana, leaving them available for sale.

In September court filings, a committee of unsecured creditors said Breitburn has now been in bankruptcy for more than 16 months and still does not have a reorganization plan on file.

The committee argues that the best course is to allow it to propose a “transparent sale process employing well-established procedures that will maximize value” for the company’s Permian Basin assets.

The creditors said the unsolicited offers Breitburn has received are based upon public data only. Diamondback, for instance, relied on data the company released in May “and should be viewed by the court and creditors as merely a starting point or a ‘floor.’ ”

“Should the committee be allowed to pursue its proposed path, it is fair to assume the estate may receive higher base “stalking-horse” bids as well as higher competing bids once the debtors’ assets are formally put up for auction,” court filings said.

Breitburn’s bankruptcy is filed in the U.S. Bankruptcy Court for the Southern District of New York.

Darren Barbee can be reached at dbarbee@hartenergy.com.