Ascent Resources Marcellus Holdings LLC, a shale driller founded by the late U.S. fracking pioneer Aubrey McClendon, said on Feb. 6 it had filed for Chapter 11 bankruptcy as part of a negotiated plan with lenders to reduce about $1 billion of debt and boost liquidity.
Privately held Ascent is one of several energy companies McClendon launched after leaving Chesapeake Energy Corp. (NYSE: CHK) in 2013, which he had founded and built into one of the largest U.S. shale drillers.
The filing in the U.S. Bankruptcy Court in Wilmington, Del., is for Ascent's Marcellus formations, which own development rights on some 43,000 acres in West Virginia, and has no impact on its Utica play in Ohio, the company said in a news release.
The Marcellus and Utica formations are owned by entities with separate capital structures, it said.
More than 100 North American oil and gas producers have entered bankruptcy since early 2015, according to the Haynes and Boone law firm, as a fall in commodity prices crippled their ability to service debt and invest in their operations.
Oklahoma City, Okla.-based Ascent said it expects to be in Chapter 11 for roughly 45 to 60 days, noting that a majority of its first and second lien lenders have already voted to accept its restructuring plan.
The company owes $708 million on a first lien and $348 million on a second lien loan, a company spokeswoman said.
Ascent plans to form a new board of directors upon its Chapter 11 emergence, though its existing management team would continue to manage day-to-day operations, it said, and added that its vendors and service providers would not be impaired by the restructuring.
The case is In re Ascent Resources - Marcellus, LLC in U.S. District Court for the District of Delaware, No. 18-10266.
Recommended Reading
Private Equity Looks for Minerals Exit
2024-07-26 - Private equity firms have become adroit at finding the best mineral and royalties acreage; the trick is to get public markets to pay more attention.
Quantum Backs Tug Hill Team in New E&P Vickery Energy
2024-09-24 - Quantum Capital Group is backing the executives behind Tug Hill Operating, which sold to EQT Corp. for $5.2 billion, in a new Appalachian Basin company Vickery Energy Partners.
Avant Natural Resources Steps Out with North Delaware Avalon Tests
2024-08-21 - With the core of the Delaware Basin in full manufacturing mode, Avant Natural Resources is pushing an operated portfolio into the northern reaches of the New Mexico Delaware.
From Failed Post-Civil War Railroad to Permian Basin Royalties Giant
2024-08-06 - The Texas Pacific Land Corp. has a storied history, setting it up to thrive in Permian royalties, water, easements and more.
EOG Testing 700-ft Spacing in Ohio’s Utica Oil Window, Sees Success
2024-08-05 - EOG Resources’ test at the northern end of its 140-mile-long north-south leasehold produced IPs similar to those from a nearby pad.