6 Jan 2021listing compliance notice▼ BadMajor
Approach Resources Inc terminated the registration of a class of securities, ending its reporting obligation for them.
Announcements, explained
Each one in plain English, with the numbers worked through for a shareholder.
31 Dec 2020bankruptcy or receivership▼ BadMajor
The company reports that as of Dec 31, 2020 all conditions to the confirmed Plan of Liquidation were satisfied or waived and the Plan is now effective. Under the Plan as described in the Dec 18 filing, the common stock is now cancelled with no distribution. This filing itself only states the Plan became effective.
18 Dec 2020bankruptcy or receivership▼ BadMajor
On Dec 16, 2020 the bankruptcy court confirmed the Plan of Liquidation. Prepetition secured lenders get all available cash after the DIP is repaid, up to the full amount of their claims. General unsecured creditors, including senior noteholders, share a $1.8M gift reserve. Common stock gets no distribution and all equity interests are cancelled on the Plan's effective date. Directors and officers are replaced by a Plan Administrator to wind the companies down, and the company intends to file a Form 15 to end its SEC reporting. This answers the open question of what shareholders receive: nothing.
1 Oct 2020asset acquisition disposition● NeutralMajor
On Sept 30, 2020 Approach closed the sale of substantially all its assets to Zarvona III-A, L.P. for $115.5M (subject to adjustments), after the court's Sept 14 approval. The DIP loan was repaid in full from the sale proceeds and its liens released. This resolves the pending Zarvona closing; the filing does not say what shareholders receive.
29 Sept 2020bankruptcy or receivership● Neutral
The court approved the Zarvona sale ($115.5M) effective Sept 14, 2020, and on Sept 28 Approach asked the court to approve payouts to certain senior employees under the incentive plan at target levels once the sale closes. The incentive plan itself was approved Feb 19, 2020. The filing gives no payout amounts and does not say what shareholders receive from the sale.
8 Sept 2020material agreement▼ BadMajor
On Sept 3, 2020 Approach agreed to sell substantially all of its assets to Zarvona III-A, L.P. for $115.5M (subject to adjustments), with an $11.55M deposit in escrow, subject to court approval. This replaces the failed Alpine deal, whose settlement the court approved July 2, 2020; the price is lower than the roughly $192.5M Alpine agreed to pay. The filing does not say what shareholders would receive.
11 June 2020bankruptcy or receivership▼ BadMajor
On June 9, 2020 Approach and Alpine settled their dispute over the terminated asset purchase agreement, subject to court approval. Alpine is to pay Approach the full $19.25M deposit plus any earnings on it, and a further $2.875M; the purchase agreement ends and both sides exchange full releases. This resolves the dispute but means the roughly $192.5M Alpine sale will not happen. The filing also notes the common stock's Nasdaq deregistration took effect Mar 17, 2020.
1 Apr 2020material agreement termination▼ BadMajor
On Mar 26, 2020 Alpine sent written notice purporting to terminate the roughly $192.5M asset purchase agreement. If the termination were effective, the $19.25M deposit would go back to Alpine and Approach would owe it $250,000 expense reimbursement. Approach disputes the termination, called it legally ineffective in a Mar 31 letter, and says it will pursue remedies if Alpine does not close. This puts the sale announced in February in doubt.
14 Feb 2020material agreement● Neutral
On Feb 10, 2020 the company and its lenders amended the debtor-in-possession loan, resetting the sale and plan deadlines effective Jan 9, 2020. The new dates include qualified bids by Feb 14, an auction by Feb 26, a sale order by Mar 6, a plan filing by Mar 9, a disclosure statement order by Apr 6 and plan confirmation by May 22, 2020. This aligns the loan's deadlines with the Alpine sale timetable.
7 Feb 2020material agreement● NeutralMajor
On Feb 4, 2020 Approach agreed to sell substantially all of its assets to Alpine Energy Acquisitions, LLC for about $192.5M (subject to adjustments), with a $19.25M deposit funded Feb 6. It is a 'stalking horse' bid subject to court approval, with a $5.25M break-up fee and up to $250,000 expense reimbursement if a competing bid wins; bids were due Feb 14 and an auction was planned for about Feb 26. This is the first named buyer from the sale process begun in the bankruptcy; the filing does not say what shareholders would receive.
30 Jan 2020bankruptcy or receivership● Neutral
On Jan 28, 2020 the company asked the bankruptcy court to approve a Key Employee Incentive Plan paying certain senior employees through the planned asset sale process; the board and its compensation committee approved it. No amounts or names are given in this filing.
14 Jan 2020bankruptcy or receivership● NeutralMajor
On Jan 9, 2020 the bankruptcy court approved bidding procedures (the company's motion was filed Dec 11, 2019) for a possible sale of all or substantially all of the company's assets. This moves the Section 363 sale from 'being considered' toward an auction process; the filing does not name a buyer or price or say what shareholders would receive.
18 Dec 2019bankruptcy or receivership● NeutralMajor
On Dec 13, 2019 the bankruptcy court gave final approval to the $41.25M debtor-in-possession loan ($16.5M new money plus a $24.75M roll-up of existing debt), which became effective Dec 18, and also approved the trading limits on holders of 4.45M+ shares (about 4.75%) that were only interim before. The court also allocated to the estate 2% of net cash proceeds from any asset sales, between $2M and $5M. The sale milestones are unchanged (sale order within 100 days, plan confirmation within 180 days), and the filing still says nothing about what shareholders would receive.
17 Dec 2019listing compliance notice● NeutralMajor
Approach Resources Inc's exchange filed to remove a class of its securities from listing.
19 Nov 2019bankruptcy or receivership▼ BadMajor
On Nov 18, 2019, Approach and all its subsidiaries filed voluntary Chapter 11 petitions in the Southern District of Texas, ending the string of forbearance extensions on the credit agreement. The filing accelerated the credit agreement and the senior notes indenture. The company seeks $16.5M of new debtor-in-possession financing from JPMorgan-led lenders (up to $41.25M including a $24.75M roll-up of existing debt) and is considering selling all or substantially all assets under Section 363. The proposed milestones include a sale order within 100 days and plan confirmation within 180 days. The common stock began trading on OTC Pink on Nov 12, 2019, with Nasdaq expected to delist it. The filing proposes limits on trading of 4.75%+ holders to protect tax losses. It does not state what shareholders will receive.
22 Oct 2019material agreement▼ Bad
A ninth amendment, effective Oct 21, 2019, extends the forbearance to the earlier of Oct 28, 2019 or a termination event, with the same covered defaults. It is another one-week extension and no resolution is stated.
16 Oct 2019material agreement▼ Bad
An eighth amendment extends the forbearance only to the earlier of Oct 21, 2019 or a termination event, with the same covered defaults as the seventh amendment. It is a six-day extension and no long-term fix is described.
4 Oct 2019material agreement▼ Bad
A seventh amendment extends the forbearance to the earlier of Oct 15, 2019 or a termination event. The covered defaults now also include the Sept 30, 2019 EBITDAX-to-interest, leverage and current-ratio tests, so the problems now span a further quarter; missed interest payments remain covered. No resolution is stated.
12 Sept 2019material agreement▼ BadMajor
A sixth amendment extends the lenders' forbearance to the earlier of Oct 3, 2019 or a termination event, and now also covers missed interest payments. It requires Approach to keep retaining certain advisors, and says that if certain specified defaults occur, loans will bear the prime-based rate plus margin plus a 2% default rate. The coverage of missed interest payments and the advisor requirement are new compared with the earlier amendments.
5 Sept 2019material agreement▼ Bad
Approach signed a fifth amendment to its forbearance agreement with its credit-agreement lenders (JPMorgan as agent), extending the lenders' agreement not to enforce remedies to the earlier of Sept 11, 2019 or a termination event. The covered defaults are the same missed EBITDAX-to-interest, leverage and current-ratio tests; it is another one-week extension and no long-term fix is described.
28 Aug 2019material agreement▼ BadMajor
A fourth amendment to the forbearance agreement extends the lenders' forbearance only to the earlier of Sept 4, 2019 or a termination event, a one-week extension covering the same covered defaults. No resolution of the credit agreement defaults is stated.
19 Aug 2019material agreement▼ BadMajor
A third amendment to the forbearance agreement extends the lenders' agreement not to enforce remedies to the earlier of Aug 28, 2019 or a termination event, with the same covered defaults as before. The extension is only about one week, and no long-term fix is described.
22 July 2019material agreement▼ BadMajor
Approach signed a second amendment to its forbearance agreement, extending the lenders' agreement not to enforce remedies to the earlier of Aug 21, 2019 or a termination event. The covered defaults now also include the June 30, 2019 EBITDAX-to-interest and leverage tests and a current-ratio test as of June 30, 2019, so the problems are widening, not resolving.
16 July 2019material agreement▲ Good
Approach's subsidiaries amended their gas purchase contract with DCP Operating Company (formerly DCP Midstream), effective May 1, 2019. The amendment raises pay for residue gas and NGLs, lets Approach choose between fixed ethane recovery and rejection, allows it to take residue gas in kind at certain points, and requires arbitration for disputes. This follows the 2011 contract and its Aug 2014 extension.
24 June 2019material agreement▼ BadMajor
Approach extended its forbearance agreement with its credit-agreement lenders (JPMorgan as agent) to the earlier of July 22, 2019 or a termination event. The lenders agreed not to enforce remedies for missed Mar 31, 2019 covenants (EBITDAX-to-interest ratio and total leverage ratio) under the May 9, 2019 forbearance. This is a short extension, and the covenant problems remain unresolved.
3 May 2019listing compliance notice▼ BadMajor
On May 2, 2019 Nasdaq notified Approach that its stock had closed below $1.00 for 30 straight business days. The company has until Oct 29, 2019 to regain compliance (possibly another 180 days via the Nasdaq Capital Market) and says it will evaluate options including a reverse stock split. There is no immediate effect on trading, but delisting is possible if it is not cured.
20 Nov 2017auditor change● Neutral
Approach's auditor Hein & Associates combined with Moss Adams on Nov 16, 2017, so Hein resigned and the audit committee engaged Moss Adams as the new auditor. The filing says Hein's reports for 2015 and 2016 were clean and there were no disagreements, so this is a routine change.
2 Nov 2017capital raising announcement● NeutralMajor
Approach reported Q3 2017 results (revenue $25.6M, net loss $8.5M, production 11.5 MBoe/d, liquidity $32.7M against a $325M borrowing base). It also agreed to buy Wolfcamp shale assets next to its Pangea West acreage from Amistad Energy Partners, a Kayne Anderson portfolio company, paying 7,573,215 new shares valued at $18.05M; closing is expected in Q4 2017. The share issue adds to the share count, and the filing says completion of additional wells was deferred to Q1 2018.
What it means for a shareholder
7.6m new shares at $18.05 to raise about $137m. That's 8.0% dilution: every existing holder's slice gets 8.0% smaller. If you held $1,000 of shares (55 at the issue price), your slice goes from 0.000064% to 0.0000589% of the company. To keep it you'd need 5 more shares - about $90 at the issue price.
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20 Mar 2017capital raising announcement● NeutralMajor
The follow-on offer to exchange 7.00% Senior Notes for stock, which followed the Wilks deal, expired on March 17, 2017 with only $14.528 million of notes tendered. Approach accepted them and will issue 4,009,728 shares (about 4.6% of the post-issuance shares), plus accrued interest, on March 22, 2017. Its 2017 capital budget and guidance are unchanged. The filing does not say whether the Wilks exchange itself has closed.
22 Dec 2016security holder rights change● Neutral
On Dec 20, 2016 Approach signed a Second Supplemental Indenture for its 7.00% Senior Notes due 2021, with the Wilks noteholders consenting. It removes substantially all restrictive covenants and some default events, but only if the Wilks exchange closes; if the agreement is terminated, the changes lapse. This is a procedural step in the Nov 2016 exchange, and it would weaken protections for any remaining noteholders.