Approach Resources files Chapter 11 to explore strategic alternatives

By Wendy Van Sickle

Columbus, Ohio, Nov. 18 – Approach Resources Inc. has commenced a voluntary Chapter 11 case in the U.S. Bankruptcy Court for the Southern District of Texas, according to a news release.

The company said it is exploring strategic alternatives, including the restructuring of its balance sheet or the sale of its business as a going concern, in the court-supervised process.

Approach also announced that it 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 Chapter 11 expenses and to provide additional liquidity.

Approach said it will continue to operate without interruption and anticipates having sufficient liquidity to timely pay all employees, vendors and suppliers for services and products during the Chapter 11 process.

The DIP financing is subject to court approval and will be provided by Approach’s current syndicate of RBL lenders, with JPMorgan Chase Bank, NA as administrative agent.

Approach said it also is seeking court approval of other “first day” motions to ensure that it can continue to operate in the ordinary course of business.

Perella Weinberg Partners LP is acting as the company’s investment banker in connection with the Chapter 11 case, including to advise Approach in its exploration of these strategic alternatives. Alvarez & Marsal North America, LLC is acting as financial adviser, and Thompson & Knight LLP is legal adviser.

Approach Resources is a Fort Worth, Tex.-based oil and gas company.

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