McClendon-founded Ascent Resources files for Chapter 11 bankruptcy

American Environmental Partners

06/02/2018 23:38

By Tracy Rucinski  
    Feb 6 (Reuters) - Ascent Resources Marcellus Holdings LLC, a 
shale driller founded by the late U.S. fracking pioneer Aubrey 
McClendon, said on Tuesday 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 he was ousted in 2013 during a 
corporate governance crisis from Chesapeake Energy Corp  CHK.N , 
which he had founded and built into one of the largest U.S. 
shale drillers. 
    McClendon died in a single-vehicle collision on March 2, 
2016, a day after he was indicted along with other unnamed 
co-conspirators on federal charges of bid-rigging. 
    The filing in the U.S. Bankruptcy Court in Wilmington, 
Delaware, 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, Oklahoma-based Ascent said it expects to be 
in Chapter 11 for approximately 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. 
 
 (Reporting by Tracy Rucinski in Chicago 
Additional reporting by Jessica DiNapoli in New York 
Editing by Matthew Lewis) 
 ((tracy.rucinski@thomsonreuters.com 
+ 1-312-408-8575 
Reuters Messaging: 
tracy.rucinski.thomsonreuters.com@reuters.net)) 
 
Keywords: ASCENT RESOURCES BANKRUPTCY/