Independent Appalachian shale gas driller Rex Energy Corp. is looking to start up the sale process for its remaining assets as it initiates voluntary proceedings under Chapter 11 bankruptcy protection.
The company started voluntary proceedings under Chapter 11 to facilitate the sale of its remaining assets and to address its debt obligations. Rex Energy expects to complete the planned sale process within the next four to five months.
"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," Rex Energy CEO Tom Stabley said. "Chapter 11 provides an orderly process to achieve these goals in a way that maximizes value for our stakeholders."
Rex Energy recently announced that it planned to seek Chapter 11 bankruptcy protection after posting first-quarter losses. The company also missed interest payments on second-lien loans due in April and failed to deliver its fourth-quarter and year-end 2017 financial statements to its term lender.
All of Rex Energy's first-lien lenders and about 72% of its second-lien noteholders have signed in on a restructuring support agreement. The company has already secured $100 million in financing commitment from its existing first-lien lenders. The commitment, combined with Rex Energy's normal operating cash flow, would allow the company to maintain normal operation and meet financial commitments. The company's drilling and production programs are still operating as usual, according to a May 18 news release.
