U.S. fracker Ascent Resources Marcellus targets quick Chapter 11 exit

American Environmental Partners

08/02/2018 18:15

By Tracy Rucinski  
    Feb 8 (Reuters) - U.S. shale driller Ascent Resources 
Marcellus Holdings LLC, which filed for Chapter 11 protection on 
Tuesday  urn:newsml:reuters.com:*:nL2N1PW2IR, expects to exit bankruptcy by March 31 
under the new ownership of its lenders, lawyers for the company 
and its lenders said in court on Thursday. 
    The bankruptcy petition by Ascent, one of the companies 
founded by late U.S. oilman Aubrey McClendon after he left 
Chesapeake Energy Corp  CHK.N , followed two years of 
negotiations with lenders to work out a reorganization plan, the 
lawyers said. 
    Dozens of North American oil and gas producers began filing 
for Chapter 11 protection in 2015 after a plunge in commodity 
prices. Even though prices have since recovered, Oklahoma City, 
Oklahoma-based Ascent said in court papers that its revenue and 
production volume still failed to cover expenses and contract 
commitments. 
    Under Ascent Resources Marcellus' consensual reorganization 
plan, first-lien and second-lien lenders, owed roughly $1 
billion total, will swap their debt in exchange for equity. 
Management also stands to hold shares in the new company.  
    "It took longer than we had expected but we were ultimately 
able to reach this agreement" to keep the company operating, 
Damian Schaible, a lawyer representing a lender steering 
committee, said at a hearing in U.S. Bankruptcy Court in 
Wilmington, Delaware.    
    The bankruptcy 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 assets in Ohio, which fall under 
a separate capital structure, the company said. 
    Privately owned Ascent's vendors and service providers will 
not be impaired by the restructuring, which has the support of a 
majority of its lenders. 
    Ascent's lawyers asked for a confirmation hearing with U.S.  
Bankruptcy Judge Laurie Silverstein to be held mid-March with a 
view to exiting Chapter 11 by the end of the month. The company 
said the deal would reduce debt and position it for future 
growth. 
    Ascent Resources Marcellus Holdings is one of several 
companies launched by U.S. fracking pioneer McClendon after he 
was ousted from Chesapeake in 2013 during a corporate governance 
crisis. He was indicted along with other unnamed co-conspirators 
on federal charges of bid-rigging on March 1, 2016, and died in 
a single-vehicle collision a day later. 
    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 
Editing by Matthew Lewis) 
 ((mailto:tracy.rucinski@thomsonreuters.com 
+1 312 408-8575; Reuters Messaging: 
tracy.rucinski.thomsonreuters.com@reuters.net)) 
 
Keywords: ASCENT RESOURCES MARCELLUS BANKRUPTCY/