Item 1.01 Entry into a Material Definitive Agreement.
As previously disclosed, on November 18, 2019, Approach Resources Inc.
("Approach," the "Company," the "Seller" or "we") and all of its subsidiaries
(the "Filing Subsidiaries and, together with Approach, the "Debtors") filed
voluntary petitions (collectively, the "Bankruptcy Petitions") under chapter 11
("Chapter 11"), of Title 11 of the U.S. Code (the "Bankruptcy Code") in the
United States Bankruptcy Court for the Southern District of Texas (the "Court"),
thereby commencing the Chapter 11 cases captioned In re Approach Resources Inc.,
et al., Case No. 19-36444 (Bankr. S.D. Tex.) (the "Chapter 11 Cases").
As previously disclosed, on September 3, 2020, the Company and certain of the
Filing Subsidiaries entered into an asset purchase agreement (the "APA") with
Zarvona III-A, L.P., a Delaware limited partnership ("Zarvona") and an affiliate
of Zarvona Energy LLC. Pursuant to the terms of the APA, the Company agreed to
sell substantially all of the Debtors' assets (the "Assets," and such sale, the
"Asset Sale") to Zarvona for $115.5 million, subject to certain customary
purchase price adjustments as set forth in the APA.
On September 14, 2020, the Court approved the Asset Sale in the Order Approving
(A) The Sale of Substantially All of the Debtors' Assets Free and Clear of All
Liens, Claims, Encumbrances and Interests; and (B) The Assumption and Assignment
of Certain Contracts and Unexpired Leases [Dkt. No. 605] (the "Sale Order").
Following the entry of the Sale Order and the satisfaction of the closing
conditions under the APA, on September 30, 2020, the Debtors completed the
disposition of substantially all of their Assets to Zarvona in accordance with
the terms of the APA. Upon the closing of the Asset Sale, all outstanding
obligations under the Company's Senior Secured Super Priority
Debtor-In-Possession Credit Agreement (the "DIP Facility") among the Company, as
borrower, the guarantors party thereto, JPMorgan Chase Bank, N.A., as
administrative agent and issuing bank, and the financial institutions or other
entities from time to time parties thereto as lenders, were repaid from proceeds
of the Asset Sale, all loan documents under the DIP Facility were terminated and
all security interests and liens on the Debtors' assets under the DIP Facility
were released.
The foregoing description of the APA does not purport to be complete and is
qualified in its entirety by reference to the APA, a copy of which was
previously filed as Exhibit 2.1 to the Company's Current Report on Form 8-K
filed with the Securities Exchange Commission on September 8, 2020 and which is
referenced as Exhibit 2.1.
Information regarding the Chapter 11 Cases is available through the Company's
website under the Restructuring Information tab, which contains a link to the
claims agent's website, https://dm.epiq11.com/approachresources.
Item 1.02 Termination of a Material Definitive Agreement.
The information set forth in Item 1.01 of this Current Report on Form 8-K is
incorporated herein by reference.
Item 2.01 Completion of Acquisition or Disposition of Assets.
The information set forth in Item 1.01 of this Current Report on Form 8-K is
incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
2.1* Asset Purchase Agreement, between Approach Resources Inc. and
Zarvona III-A, L.P., dated as of September 3, 2020 (filed as
Exhibit 2.1 to the Company's Current Report on Form 8-K filed
September 8, 2020, and incorporated herein by reference).
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*Certain exhibits and schedules have been omitted and the Company agrees to
furnish supplementally to the Securities and Exchange Commission a copy of any
omitted exhibits upon request.
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