Permian operator Approach Resources files for bankruptcy protection

Fort Worth’s Approach Resources is the latest oil and gas firm to file for bankruptcy.

Company leaders also indicated they will consider options including a restructuring of the balance sheet and possible sale of the firm. The firm’s chapter 11 filing was made Monday as Approach became the latest oil and gas drilling company to become victim to the decline in energy prices.

Approach has drilling operations in West Texas where it acquired oil and gas properties in the Permian Basin in 2004.

Despite a corporate pledge to “have the operational flexibility to adjust capital spending upward in response to a continued commodity price recovery”, the company’s debt became too large to continue operations as they existed.

The company also announced it has received a commitment from pre-petition lenders for $16.5 million in new money “debtor-in-possession” financing subject to court approval and customary closing conditions.

Approach leadership plans to use the available cash to pay the expenses of Chapter 11 and provide additional liquidity. The firm said it will continue to operate without interruption and “anticipates having sufficient liquidity to pay all employees, vendors and suppliers for services and products” during the bankruptcy process.

The Company has selected Perella Weinberg Partners LP to act as its investment banker in connection with the Chapter 11 case, including to advise the Company in its exploration of these strategic alternatives. The Company is also being assisted by Alvarez & Marsal North America, LLC as financial advisor, and Thompson & Knight LLP as legal advisors.

 

 

 

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