Item 1.01 - Entry into a Material Definitive Agreement.
On February 3, 2020, Forbes Energy Services Ltd. ("Forbes") and certain of its
subsidiaries entered into the Second Amendment to the existing Credit Agreement
(the "Amendment"), which amended the Credit Agreement, dated as of November 16,
2018, by and among Forbes, the subsidiaries of Forbes identified therein as
borrowers, and Regions Bank, as Administrative Agent and Lender (the "Credit
Agreement"). The Amendment amended the Credit Agreement, effective as of
December 31, 2019, to provide that (i) the fixed charge coverage ratio financial
covenant will not be tested for each of the months ending December 31, 2019
through June 30, 2020 and (ii) during the period from December 1, 2019 through
the date that financial statements are delivered for the fiscal month ending
July 31, 2020, "excess availability" under the Credit Agreement shall equal
$2,500,000 or more.
Item 8.01 - Other Events.
On January 29, 2020, a well control incident occurred on a producing well in
Burleson County, Texas operated by Chesapeake Operating LLC ("Chesapeake"), a
subsidiary of Chesapeake Energy, during a workover operation. Forbes Energy
Services LLC, a subsidiary of Forbes, was one of several independent contractors
engaged to perform the workover operation. The incident resulted in one injured
and three fatalities, one of which was a Forbes employee. Forbes is cooperating
with regulatory agencies investigating this incident. At this time, a lawsuit
captioned Linda Milanovich v. Chesapeake Operating, L.L.C. and Chesapeake Energy
Corporation has been filed in the District Court of Burleson County, Texas. Each
of Chesapeake and Forbes has asserted indemnification claims against the other
in this lawsuit. Forbes has also asserted claims against Eagle PCO, LLC, one of
the independent contractors. Forbes anticipates that additional lawsuits will be
brought on behalf of deceased and injured parties. Forbes does not currently
expect claims related to this incident, individually or in the aggregate, to
have a material impact on Forbes' financial position or results of operations.
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