Approach Resources Inc., Fort Worth, along with all of its subsidiaries, commenced a voluntary Chapter 11 case in the US bankruptcy court for the Southern District of Texas (Houston Division) to explore strategic alternatives, including, without limitation, the restructuring of its balance sheet or the sale of its business as a going concern, in a court-supervised process.
The company has received a commitment from its pre-petition lenders for $16.5 million in new money “debtor-in-possession” financing, subject to court approval and customary closing conditions. The company expects to use its available cash along with proceeds of the DIP financing to pay the expenses of Chapter 11 and to provide additional liquidity. The company will continue to operate without interruption and anticipates having sufficient liquidity to timely pay all employees, vendors, and suppliers for services and products provided during the Chapter 11 process.
Approach also is seeking court approval of a variety of other “first day” motions to ensure that it can continue to operate in the ordinary course of business during its case as intended.
In August, the company posted production for second quarter of 875,000 boe (23% oil, 37% NGLs, 40% natural gas). Net loss for the quarter was $13.6 million on revenues of $14.7 million.