Rex Energy files Chapter 11 bankruptcy, looks to sell assets

By Caroline Salls

Pittsburgh, May 18 – Rex Energy Corp. filed Chapter 11 bankruptcy on Friday in the U.S. Bankruptcy Court for the Western District of Pennsylvania to began a process for the sale of its remaining assets, according to a company news release.

Rex said it filed bankruptcy under a restructuring support agreement signed by 100% of its first-lien lenders and 72% of its second-lien noteholders.

The company said its drilling and production programs are operating as usual, and it is maintaining the necessary staffing and resources to meet its commitments to gathering and processing partners.

“Over the past seven months, Rex Energy has been in deep discussion with our lenders and advisers to evaluate every aspect of our business and take proactive steps to overcome the challenges our industry continues to face,” chief executive officer Tom Stabley said in the release.

“We have undoubtedly made progress in addressing the realities of the global commodities market but require a more fulsome debt restructuring to overcome the immense pressures our business is facing.

“Ultimately, we decided that the best possible outcome was to put our remaining assets into the hands of owners with the financial strength necessary to position them for long-term growth and success.”

In conjunction with the bankruptcy filing, the company has secured a financing commitment of $100 million from its existing first-lien lenders, which, combined with its normal operating cash flow, will allow Rex Energy to maintain normal operations and meet ongoing financial commitments.

In addition, Rex has filed a series of first-day motions that will allow it to uphold commitments to stakeholders, including employees, vendors and service providers, gathering and processing partners and royalty owners.

The company said it aims to complete the planned sale process within the next four to five months.

Asset sale and DIP financing terms had not yet been filed as of Friday evening.

According to court documents, Rex has $1 billion to $10 billion in both assets and debt.

The company’s largest unsecured creditors are WSFS Trust of Wilmington, Del., with a 1%/8% second-lien senior notes claim in an unknown amount; MarkWest Liberty Midstream & Resources, LLC of Denver, with a $13.9 million trade debt claim; Keystone Clearwater Solutions, LLC of Cannonsburg, Pa., with a $10.89 million trade debt claim; BOK Financial of Denver, with a $7.63 million 8¾% senior notes claim and a $5.46 million 6¼% senior notes claim; OhPa Drillco, LLC, based in Houston, with a $6.49 million royalties claim; and Sumitomo Corp. of Americas of Houston, with a $6.33 million royalties claim.

The largest unsecured creditors also include ProFrac Services, LLC of Cisco, Texas, with a $5.37 million trade debt claim; Sidewinder Drilling LLC of Houston, with a $3.62 million trade debt claim; and AL Marcellus Holdings, LLC of Boston, with a $3.36 million royalties claim.

Jones Day, Perella Weinberg Partners, Tudor, Pickering, Holt & Co. and FTI Consulting are advising Rex in the Chapter 11 cases.

Based in State College, Pa., Rex Energy is an oil and gas exploration and production company. The Chapter 11 case number is 18-22032.

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