Approach Resources Inc

Approach Resources Inc terminated the registration of a class of securities, ending its reporting obligation for them.

listing compliance notice

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.

bankruptcy or receivership

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.

bankruptcy or receivership

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.

asset acquisition disposition

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.

material agreement

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.

bankruptcy or receivership

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.

material agreement termination

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.

material agreement

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.

bankruptcy or receivership

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.

bankruptcy or receivership

Approach Resources Inc's exchange filed to remove a class of its securities from listing.

listing compliance notice

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.

bankruptcy or receivership

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.

material agreement

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.

material agreement

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.

material agreement

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.

material agreement

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.

material agreement

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.

listing compliance notice

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.

capital raising announcement

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.

capital raising announcement

On Nov 2, 2016 Approach agreed with Wilks Brothers and SDW Investments to swap $130.552 million of its 7.00% Senior Notes due 2021 (about 56.7% of the notes) for 39,165,600 new common shares, about 48.5% of the fully diluted stock after the swap. The deal needs a shareholder vote under NASDAQ rules and is expected to close in Q1 2017. It adds three Wilks-designated directors (board rises to eight) and caps their stake at 48.61%. Other noteholders are to be offered a follow-on exchange, which depends on shareholders approving a rise in authorized shares from 90 million to 180 million. Existing shareholders would be heavily diluted if it closes.

capital raising announcement

On May 3, 2016 Approach signed a third amendment to its credit agreement, cutting the borrowing base to $325 million from $450 million, raising the interest margin by 100 basis points, and requiring a lien on substantially all assets of the company and guarantors. It also loosened the interest-coverage covenant, allowed up to $150 million of new junior-secured or unsecured debt, and requires cash above $35 million to repay revolver loans. The attached Q1 2016 results show a net loss of $13.7 million on revenues of $17.6 million; this reverses the borrowing base increase to $600 million in Nov 2014.

debt financing

On Nov 4, 2014 Approach amended its May 2014 credit agreement, raising the borrowing base to $600 million from $450 million while keeping lender commitments at $450 million; the interest margin will now depend on use of the borrowing base rather than of commitments. The same filing carried Q3 2014 results (net income $22.4 million, revenues $68.1 million, production 14.2 MBoe/d, up 61% on the prior-year quarter) and a board change: Bryan Lawrence retired as Chairman but stays a director, CEO J. Ross Craft became Chairman, and Vean J. Gregg III became Lead Independent Director.

debt financing

On October 7, 2013 Approach closed the sale of its 50% stake in Wildcat Permian Services to a JP Energy subsidiary, resolving the September 2013 agreement. Base consideration was $213.2 million after adjustments, and Approach's net proceeds at closing were about $109.1 million, including $6 million for signing an amendment to its crude oil purchase agreement. That amendment widens the dedicated area to parts of Crockett and Schleicher Counties, gives Approach priority rights to pipeline capacity, and has JP Energy guarantee Wildcat's obligations. Approach says it plans to use net operating loss carryforwards to reduce cash taxes on the gain.

asset acquisition disposition

On September 18, 2013 Approach, through its subsidiary Approach Midstream Holdings, agreed with JP Energy to sell its 50% interest in Wildcat Permian Services (the crude pipeline business it held an interest in since September 2012) as part of a $210 million sale of the whole company. Approach's cash proceeds are stated as $108 million before taxes, and closing depends on conditions including an amendment to the crude oil purchase agreement. The deal can be terminated if not closed by October 18, 2013.

material agreement

On June 6, 2013 Approach agreed to sell $250 million of 7.00% Senior Notes due 2021 through J.P. Morgan Securities, and completed the sale on June 11, 2013. It expects net proceeds of about $243 million, to repay revolving credit facility debt, fund capital spending and cover working capital. This uses the room for unsecured notes created by the November 2012 credit amendment; the notes are guaranteed by subsidiaries and interest is payable each June 15 and December 15, starting December 15, 2013. The filing notes that affiliates of some underwriters are lenders under the credit facility and will receive part of the proceeds.

debt financing

On September 19, 2012 Approach agreed to sell 5,000,000 new common shares to underwriters led by J.P. Morgan Securities, with a 30-day option for 750,000 more; closing is scheduled September 25, 2012. Proceeds are meant mainly to fund development of its Wolfcamp oil shale play and working capital, with credit facility borrowings repaid in the meantime. New shares dilute existing holders, and this is the third share sale since November 2010.

material agreement

On November 15, 2011 Approach agreed to sell 4,000,000 new common shares to underwriters led by J.P. Morgan Securities, with a 30-day option for 600,000 more; closing is scheduled November 21, 2011. Proceeds are meant mainly to fund development of its Wolffork oil shale play and working capital, with borrowings on the credit facility repaid in the meantime. New shares dilute existing holders, and this is the second share sale since November 2010.

material agreement

A tenth amendment, effective May 4, 2011, raises the borrowing base from $150 million to $200 million and the maximum commitment from $200 million to $300 million. Maturity moves to July 31, 2014, the debt-to-EBITDAX covenant loosens from 3.5x to 4x, interest margins fall, up to $200 million of senior unsecured debt is permitted, and Royal Bank of Canada joins as a fifth lender. Fees paid were a $150,000 arrangement fee and a $675,000 commitment fee.

debt financing

Approach's subsidiary agreed on February 23, 2011 to buy a further 38.33% working interest in Cinco Terry (Crockett County, Texas) from J. Cleo Thompson & James Cleo Thompson, Jr., L.P. and Wes-Tex Drilling Company, L.P. for $76.0 million, and completed it February 28. It was funded partly by a $67 million draw on the credit facility at 4.75% interest, leaving about $82.7 million available. This continues the Cinco Terry buildup begun with the October 2010 purchase from Magnum Hunter, and financial statements for the assets are due by May 11, 2011.

asset acquisition disposition

Approach agreed on November 10, 2010 to sell 5,750,000 new common shares to underwriters led by J.P. Morgan Securities, with a 30-day option for up to 862,500 more; closing is expected November 17, 2010. Issuing new shares increases the share count, so existing holders' ownership is diluted. The filing does not state the price or what the proceeds will be used for.

material agreement

Approach's subsidiary bought an additional 10% working interest in the Cinco Terry field from Magnum Hunter Resources for $21.5 million (subject to adjustments, effective October 1, 2010), completed October 29, 2010. It was funded by borrowing under the $150 million credit facility. This increases the company's stake in Cinco Terry, where it already held acreage.

asset acquisition disposition

Approach signed a new $200 million credit agreement with The Frost National Bank as agent, with an initial borrowing base of $75 million and maturity July 31, 2010, secured by substantially all its oil and gas properties. It replaced the prior $100 million facility, which had no borrowings outstanding when it ended.

debt financing

An amended filing describing how the IPO closed on November 14, 2007: Approach took over Approach Oil & Gas Inc. and the 30% Ozona Northeast working interest it did not own, paying with shares (5,228,400 issued in total). Neo Canyon received 4,239,243 shares and Approach Oil & Gas stockholders received 989,157. Two $10 million convertible notes from Yorktown Energy Partners VII and Lubar Equity Fund converted into 920,631 shares each, and a registration rights agreement gives pre-IPO holders demand and piggyback rights to sell shares. This completes the offering and the contribution transactions started with the underwriting agreement.

asset acquisition disposition

Approach Resources signed the underwriting agreement for its public share offering: 7,666,667 shares at $12.00 each, of which the company sold 5,605,377 and selling stockholder Neo Canyon Exploration sold 2,061,290. The underwriters (J.P. Morgan, Wachovia, KeyBanc, Tudor Pickering) also have an option on up to 1,150,000 more shares. This is the signing of the deal behind the November 2007 prospectus.

material agreement

Nasdaq certified Approach Resources Inc's securities for listing, clearing them to begin trading.

listing compliance notice