Approach Resources Inc. (NASDAQ:AREX) (“Approach” or the “Company”)
today announced the commencement of an offer (“Exchange Offer”) to
exchange newly issued shares of its common stock, par value $0.01
per share (“Common Stock”) for $99,768,000 of outstanding 7.00%
senior notes due 2021 (“Senior Notes”).
Subject to the terms and conditions of the Exchange
Offer, each holder of Senior Notes (each, a “Holder” and
collectively, the “Holders”) may tender all or a portion of such
Holder’s Senior Notes, in exchange for 276 shares of Common Stock
per $1,000 principal amount of Senior Notes (the “Exchange
Ratio”). Assuming all currently outstanding Senior Notes are
tendered for exchange and not validly withdrawn, the Company would
issue 27,535,968 shares of Common Stock, or 25% of outstanding
shares of Common Stock, assuming (and giving pro forma effect to)
100% participation in the Exchange Offer. Holders that tender their
Senior Notes that are accepted for exchange will receive accrued
and unpaid interest on such Senior Notes up to, but not including,
the settlement date for the Exchange Offer.
The Exchange Offer will expire at 11:59 p.m., New York City
time, on March 17, 2017, unless extended or earlier terminated by
the Company (the “Expiration Date”). Holders who wish to
participate in the Exchange Offer must validly tender, and not
withdraw, all or a portion of their Senior Notes before the
Expiration Date. Tenders of Senior Notes pursuant to the Exchange
Offer may be withdrawn at any time until the Expiration
Date.
Holders who do not tender, or who tender and
validly withdraw, Senior Notes before the Expiration Date will
continue to hold such Senior Notes subject to their current terms
and conditions. The terms of the indenture governing the Senior
Notes were amended, effective January 27, 2017, to eliminate most
of the restrictive covenants, any obligation to make an offer to
repurchase the Senior Notes upon a change of control or certain
asset sales, and certain events of default provided for
therein.
The consummation of the Exchange Offer is conditioned upon the
satisfaction or waiver of the conditions set forth in the Offer to
Exchange dated January 30, 2017, for the Senior Notes (“Offer to
Exchange”). Subject to applicable law, the Company may amend,
extend or terminate the Exchange Offer. The Common Stock to be
issued in connection with the Exchange Offer will be listed on
NASDAQ Global Select Market.
The terms of the Exchange Offer are set forth solely in the
Offer to Exchange. If any person has questions regarding the terms
of the Exchange Offer, please contact Approach Resources Inc.,
Investor Relations, at 817.989.9000. If any person has questions
regarding the procedures for tendering Senior Notes in the Exchange
Offer, please contact the information agent, Okapi Partners, at
(855) 305-0856. The Exchange Offer is made only by, and pursuant to
the terms set forth in, the Offer to Exchange and accompanying
letter of transmittal, and the information in this news release is
qualified in its entirety by reference to those documents.
About Approach Resources
Approach Resources Inc. 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.
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, statements contained in this press
release relating to consummation of the Follow-On Exchange Offer
and effects thereof are forward-looking statements. These
statements are based on certain assumptions made by the Company
based on management’s 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
Exchange Offer, (2) the failure to achieve 100% participation in
the Exchange Offer, (3) a continued decline in commodities prices,
(4) changes in applicable laws or regulations, and (5) other risks
and uncertainties indicated from time to time in the definitive
proxy statement filed with the SEC in connection with the Initial
Exchange and Exchange Offer on December 13, 2016, including those
under “Risk Factors” therein, and other documents filed or to be
filed with the SEC by Approach. No assurances can be provided as to
whether some, all or none of the Holders will validly tender, and
not withdraw, their Notes in the Exchange Offer in exchange for
shares of Common Stock. The Company’s SEC filings are
available on the Company’s 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.
NO OFFER OR SOLICITATION
THE COMMON STOCK WILL BE ISSUED PURSUANT TO THE EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS
AMENDED (“SECURITIES ACT”), UNDER SECTION 3(A)(9) OF THE SECURITIES
ACT. THE COMPANY HAS MADE NO ARRANGEMENTS FOR AND HAS NO
UNDERSTANDING WITH ANY DEALER, SALESMAN OR OTHER PERSON REGARDING
THE SOLICITATION OR RECOMMENDATION OF TENDERS HEREUNDER. ANY SUCH
SOLICITATION OR RECOMMENDATION OF TENDERS BY PERSONS OTHER THAN THE
COMPANY MUST NOT BE RELIED UPON BY YOU AS HAVING BEEN AUTHORIZED BY
THE COMPANY.
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 FOLLOW-ON EXCHANGE OFFER. THE
COMPANY IS MAKING THE FOLLOW-ON EXCHANGE OFFER ONLY BY, AND
PURSUANT TO THE TERMS OF, THE OFFERS TO EXCHANGE AND LETTERS OF
TRANSMITTAL. THE FOLLOW-ON EXCHANGE OFFER IS 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 FOLLOW-ON EXCHANGE OFFER MAKES ANY
RECOMMENDATION IN CONNECTION WITH SUCH EXCHANGE OFFER. 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.
INVESTOR CONTACT
Suzanne Ogle
Vice President - Investor Relations & Corporate Communications
ir@approachresources.com
817.989.9000
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