UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the
Registrant ☒
Filed by a Party other than the Registrant ☐
Check the appropriate box:
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to §240.14a-12
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APPROACH
RESOURCES INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title of each class of securities to which transaction applies:
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(2)
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Aggregate number of securities to which transaction applies:
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(3)
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing
fee is calculated and state how it was determined):
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(4)
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Proposed maximum aggregate value of transaction:
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(5)
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Total fee paid:
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement No.:
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(3)
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Filing Party:
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(4)
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Date Filed:
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Important Information
The following includes a press release issued by Approach Resources Inc. (the Company) to announce the reaffirmation of the borrowing base under
its revolving credit facility. The foregoing is filed herewith pursuant to Rule 14a-12.
Additional Information and Where to Find It
In connection with the proposed transactions previously announced by the Company, the Company intends to file a definitive proxy statement with the Securities
and Exchange Commission (SEC). The definitive proxy statement and other relevant documents will be sent or given to the stockholders of the Company and will contain important information about the proposed transactions and related
matters. The Companys stockholders and other interested persons are advised to read, when available, the definitive proxy statement in connection with the Companys solicitation of proxies for the meeting of stockholders to be held to
approve to certain aspects of the proposed transactions because these materials will contain important information about the proposed transactions. The definitive proxy statement will be mailed to the Company stockholders as of a record date to be
established for voting on the proposed transactions. Stockholders will also be able to obtain copies of the definitive proxy statement once it is available, without charge, at the SECs website at www.sec.gov or by directing a request to:
Approach Resources Inc., One Ridgmar Centre, 6500 West Freeway, Suite 800, Fort Worth, Texas 76116, Attention: Investor Relations, (817) 989-9000.
Participants in Solicitation
The Company and its
directors and officers may be deemed participants in the solicitation of proxies of the Companys stockholders in connection with the proposed transactions. The Company stockholders and other interested persons may obtain, without charge, more
detailed information regarding the directors and officers of the Company in the Companys proxy statement for its 2016 Annual Meeting of Stockholders, which was filed with the SEC on April 20, 2016. Information regarding the persons who
may, under the SEC rules, be deemed participants in the solicitation of proxies to the Company stockholders in connection with the proposed transactions will be set forth in the definitive proxy statement for the proposed transactions when
available. Additional information regarding the interests of participants in the solicitation of proxies in connection with the proposed transactions will be included in the definitive proxy statement that the Company intends to file with the SEC.
Forward Looking Statements
The attached press
release contains forward-looking statements, including those related to the proposed transactions and their expected benefits. These statements are subject to known and unknown risks and uncertainties that could cause actual results to differ
materially from those expressed or implied by such statements, including, but not limited to, satisfaction of conditions to closing of the transactions, including the ability to secure the required stockholder approvals and other risks described in
the Companys SEC filings. All forward-looking statements are based on managements estimates, projections and assumptions as of the date hereof, and the Company undertakes no obligation to update any forward-looking statements.
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NO OFFER OR SOLICITATION
THE ATTACHED PRESS RELEASE IS FOR INFORMATIONAL PURPOSES ONLY AND SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES
PURSUANT TO THE PROPOSED TRANSACTIONS OR OTHERWISE, NOR SHALL THERE BE ANY SALE OF SECURITIES IN ANY JURISDICTION IN WHICH THE OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO THE REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY
SUCH JURISDICTION. THIS ANNOUNCEMENT IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY ANY OF SECURITIES AND SHALL NOT CONSTITUTE AN OFFER, SOLICITATION OR SALE IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE IS
UNLAWFUL.
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For Immediate Release
November 9,
2016
Approach Resources Announces
Reaffirmation of Borrowing Base of $325 Million
Fort Worth, Texas, November 9, 2016
Approach Resources Inc.
(NASDAQ: AREX)
today announced that it has completed its fall
2016 semi annual borrowing base redetermination of its revolving credit facility. The borrowing base was unanimously reaffirmed by the bank group at $325 million and there were no changes to the existing terms or conditions of the credit
agreement. Under the terms of the credit agreement, the bank group redetermines the borrowing base semiannually using the banks estimates of reserves and future oil and gas prices. The next borrowing base redetermination is scheduled
to occur in April 2017. At November 8, 2016, Approach had $275.0 million outstanding under its revolving credit facility, resulting in liquidity of $52.2 million.
Sergei Krylov, Approachs Executive Vice President and Chief Financial Officer, commented, We appreciate the support of our bank
group as we continue to execute on our strategy of maintaining financial flexibility and right-sizing the balance sheet for the current commodity price environment. The reaffirmed borrowing base, along with our recently-announced debt exchange,
will position the Company to resume production growth while continuing to operate within cash flow. This reaffirmation of lender commitments at $325 million is a validation of the continued productivity improvements, cost reduction initiatives
and recapitalization transactions that have been the focus of the entire Approach team. We look forward to working with our bank group on our future growth initiatives.
About Approach Resources
Approach
Resources Inc.
(Approach or the Company) is an independent energy company focused on the exploration, development, production and acquisition of unconventional oil and gas reserves in the Midland Basin of the greater
Permian Basin in West Texas. For more information about the Company, please visit
www.approachresources.com
. Please note that the Company routinely posts important information about the Company under the Investor Relations section
of its website.
Supplemental Financial and Other Measures
Liquidity
Liquidity is calculated by
adding the net funds available under our revolving credit facility and cash and cash equivalents. We use liquidity as an indicator of the Companys ability to fund development and exploration activities. However, this measurement has
limitations. This measurement can vary from year-to-year for the Company and can vary among companies based on what is or is not included in the measurement on a companys financial statements. This measurement is provided in addition to, and
not as an alternative for, and should be read in conjunction with, the information contained in our financial statements prepared in accordance with GAAP (including the notes), included in our Securities and Exchange Commission (SEC)
filings.
The table below summarizes our liquidity at November 8, 2016 (in thousands).
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Liquidity at
November 8, 2016
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Borrowing base
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$
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325,000
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Cash and cash equivalents
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2,476
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Senior secured credit facility outstanding borrowings
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(275,000
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)
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Outstanding letters of credit
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(325
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Liquidity
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$
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52,151
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NO OFFER OR SOLICITATION
THIS PRESS RELEASE IS NEITHER AN OFFER TO PURCHASE NOR A SOLICITATION TO BUY ANY OF THE EXISTING SENIOR NOTES NOR IS IT A SOLICITATION FOR
ACCEPTANCE OF THE INITIAL EXCHANGE OR THE FOLLOW-ON EXCHANGE OFFER. THE COMPANY IS MAKING THE INITIAL EXCHANGE AND THE FOLLOW-ON EXCHANGE OFFER ONLY BY, AND PURSUANT TO THE TERMS OF, THE OFFERS TO EXCHANGE AND LETTERS OF TRANSMITTAL. THE INITIAL
EXCHANGE AND THE FOLLOW-ON EXCHANGE OFFER ARE NOT BEING MADE IN ANY JURISDICTION IN WHICH THE MAKING OR ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE WITH THE SECURITIES, BLUE SKY OR OTHER LAWS OF SUCH JURISDICTION. NONE OF THE COMPANY, ANY
INFORMATION AGENT OR ANY EXCHANGE AGENT FOR THE INITIAL EXCHANGE OR THE FOLLOW-ON EXCHANGE OFFER MAKES ANY RECOMMENDATION IN CONNECTION WITH SUCH EXCHANGE OFFERS. THIS ANNOUNCEMENT IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY
ANY OF THESE SECURITIES AND SHALL NOT CONSTITUTE AN OFFER, SOLICITATION OR SALE IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE IS UNLAWFUL.
Additional Information and Where to Find It
In connection with the recently announced debt exchange transactions (the Transactions), the Company intends to file a definitive
proxy statement with the SEC. The definitive proxy statement and other relevant documents will be sent or given to the stockholders of the Company and will contain important information about the Transactions and related matters. The Companys
stockholders and other interested persons are advised to read, when available, the definitive proxy statement in connection with the Companys solicitation of proxies for the meeting of stockholders to be held to approve certain aspects of the
Transactions because these materials will contain important information about the Transactions. The definitive proxy statement will be mailed to the Company stockholders as of a record date to be established for voting on the Transactions.
Stockholders will also be able to obtain copies of the definitive proxy statement once it is available, without charge, at the SECs website at www.sec.gov or by directing a request to: Approach Resources Inc., One Ridgmar Centre, 6500 West
Freeway, Suite 800, Fort Worth, Texas 76116, Attention: Investor Relations, (817) 989-9000.
Participants in Solicitation
The Company and its directors and officers may be deemed participants in the solicitation of proxies of the Companys stockholders in
connection with the Transactions. The Company stockholders and other interested persons may obtain, without charge, more detailed information regarding the directors and officers of the Company in the Companys proxy statement for its 2016
Annual Meeting of Stockholders, which was filed with the SEC on April 20, 2016. Information regarding the persons who may, under the SEC rules, be deemed participants in the solicitation of proxies to the Company stockholders in connection with the
Transactions will be set forth in the definitive proxy statement for the Transactions when available. Additional information regarding the interests of participants in the solicitation of proxies in connection with the Transactions will be included
in the definitive proxy statement that the Company intends to file with the SEC.
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Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the
future are forward-looking statements. Without limiting the generality of the foregoing, forward-looking statements contained in this press release specifically relate to stockholder approval and consummation of the Transactions. These
statements are based on certain assumptions made by the Company based on managements experience, perception of historical trends and technical analyses, current conditions, anticipated future developments and other factors believed to be
appropriate and reasonable by management. When used in this press release, the words will, potential, believe, estimate, intend, expect, may, should,
anticipate, could, plan, predict, project, profile, model or their negatives, other similar expressions or the statements that include those words, are intended to
identify forward-looking statements, although not all forward-looking statements contain such identifying words. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company,
which may cause actual results to differ materially from those implied or expressed by the forward-looking statements. These risks, uncertainties, assumptions and other important factors include, but are not limited to (1) the inability to complete
the Transactions due to the failure to obtain approval of the Companys stockholders to certain aspects thereof or other conditions to closing of the Transactions, (2) the failure to achieve 100% participation in the follow-on exchange offer,
(3) a continued decline in commodities prices, (4) the Companys ability to recognize the anticipated benefits of the Transactions, (5) costs related to the Transactions, (6) changes in applicable laws or regulations, and (7) other risks and
uncertainties indicated from time to time in a definitive proxy statement, including those under Risk Factors therein, and other documents filed or to be filed with the SEC by Approach. The Companys SEC filings
are available on the Companys website at www.approachresources.com. Any forward-looking statement speaks only as of the date on which such statement is made and the Company undertakes no obligation to correct or update any
forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law.
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