Le Lézard
Classified in: Oil industry
Subject: OFR

Commencement of Cash Tender Offer for Ascent Resources Utica Holdings, LLC's and ARU Finance Corporation's 9.00% Senior Notes due 2027


OKLAHOMA CITY, Oct. 20, 2020 /PRNewswire/ -- Certain affiliates of The Energy & Minerals Group ("EMG"), First Reserve Management, L.P. ("First Reserve") and Riverstone Holdings LLC ("Riverstone"), and certain other entities (collectively, the "Offerors") today announced the commencement of a modified "Dutch Auction" tender offer (the "Offer") for a portion of Ascent Resources Utica Holdings, LLC's and ARU Finance Corporation's outstanding 9.00% Senior Notes due 2027 (the "Notes").

Title of Security

CUSIP Number

Principal Amount
Outstanding(1)

Tender Cap

Early Tender
Payment (2)

Total Consideration
Acceptable Range (2) (3)

9.000% Senior Notes
due 2027

04364VAK9,
U04354AD5,
04364VAM5

$348,261,000

$60,000,000

$50.00

$800.00 to $850.00


(1)    Aggregate principal amount outstanding as of October 19, 2020.

(2)    Per $1,000 principal amount of Notes accepted for purchase.

(3)    Includes the Early Tender Payment.

The Offerors are offering to purchase, for cash, an aggregate principal amount of Notes that would result in a maximum aggregate payment amount of up to $60.0 million (inclusive of Accrued Interest (as defined below)) (the "Tender Cap"), in accordance with the modified "Dutch Auction" procedures described below and upon the terms and subject to the conditions set forth in the Offer to Purchase, dated October 20, 2020 (as it may be amended or supplemented from time to time, the "Offer to Purchase").

Holders must validly tender and not validly withdraw their Notes at or prior to 5:00 p.m., New York City time, on November 2, 2020, unless extended by the Offerors in their sole discretion (such date and time, as the same may be extended, the "Early Tender Date"), in order to be eligible to receive the Total Consideration for their Notes. The "Total Consideration" payable in cash for each $1,000 principal amount of Notes validly tendered (and not validly withdrawn) and accepted for purchase by the Offerors pursuant to the Offer (subject to proration) will be equal to the Clearing Price (as defined below) determined on or prior to the Early Acceptance Date (as defined below). The Total Consideration will include an amount (the "Early Tender Payment") equal to $50.00 in cash per $1,000 principal amount of Notes tendered and accepted for purchase. The "Tender Offer Consideration" for each $1,000 principal amount of Notes validly tendered (and not validly withdrawn) pursuant to the Offer after the Early Tender Date and at or prior to the Expiration Date and accepted for purchase by the Offerors pursuant to the Offer (subject to proration) will consist of the Total Consideration (which will be equal to the Clearing Price) less the Early Tender Payment.

In addition, holders validly tendering their Notes (and not validly withdrawing their Notes) will be paid all accrued and unpaid interest on those Notes from the date of issuance of such Notes to, but not including, the applicable settlement date, as the case may be ("Accrued Interest"). However, the sum of the aggregate Total Consideration or the Tender Offer Consideration, as applicable, and the aggregate Accrued Interest will not exceed the Tender Cap.

The Offerors will pay the same price (subject to adjustment, as described below) for all Notes validly tendered at or below the Clearing Price and accepted for purchase by the Offerors in the Offer, except the price paid for Notes validly tendered after the Early Tender Date but at or prior to the Expiration Date (and not validly withdrawn) and accepted for purchase by the Offerors (if any) will be reduced by the Early Tender Payment set forth above.

The Offer will expire at 11:59 P.M., New York City time, on November 17, 2020, unless extended or earlier terminated by the Offerors in their sole discretion (such date and time, as the same may be extended, the "Expiration Date"). Notes tendered may be validly withdrawn at any time at or prior to 5:00 p.m., New York City time, on November 2, 2020, unless extended by the Offerors in their sole discretion (such date and time, as the same may be extended, the "Withdrawal Date"), but not thereafter, except in the limited circumstances discussed in the Offer to Purchase. The Offerors reserve the right to amend, extend or terminate the Offer at any time. The Offer is subject to the satisfaction of certain conditions as described in the Offer to Purchase.

The Offer is being conducted as a modified "Dutch Auction." Holders who elect to participate may specify the price they would be willing to receive in exchange for each $1,000 principal amount of Notes they tender in the Offer. The price that holders specify for each $1,000 principal amount of Notes must be in increments of $2.50, and must be within a range of $800.00 (the "Minimum Offer Price") to $850.00 (the "Maximum Offer Price") per $1,000 principal amount of Notes. Holders who do not specify a price will be deemed to have specified a price equal to the Minimum Offer Price in respect of Notes tendered and to accept the Clearing Price determined by the Offerors. Tenders of Notes for which a price is specified below the Minimum Offer Price will be deemed to have specified the Minimum Offer Price. Tenders of Notes for which a price is specified in excess of the Maximum Offer Price will not be accepted and will not be used for the purpose of determining the Clearing Price. Tenders of Notes for which a price is specified other than in whole increments of $2.50 will be rounded down to the nearest $2.50 increment.

The Offerors, if they accept Notes in the Offer, will accept Notes validly tendered (and not validly withdrawn) on or prior to the Early Tender Date in the order of the lowest to the highest tender prices specified by tendering holders (in increments of $2.50), and promptly following the Early Tender Date (the "Early Acceptance Date") will select the single lowest price (the "Clearing Price") per $1,000 principal amount of Notes to enable the Offerors to purchase the principal amount of Notes that would result in an aggregate payment amount equal to the Tender Cap (or, if the aggregate payment amount would be less than the Tender Cap, all Notes so tendered).

If at the Early Tender Date the aggregate principal amount of the Notes validly tendered at or below the Clearing Price (and not validly withdrawn) would result in an aggregate payment amount that exceeds the Tender Cap and the Offerors elect to accept any Notes validly tendered (and not validly withdrawn) on or prior to the Early Tender Date, then on the Early Acceptance Date, subject to the terms and conditions of the Offer, the Offerors will accept for purchase, first, Notes validly tendered (and not validly withdrawn) at prices (in increments of $2.50) below the Clearing Price and, thereafter, Notes validly tendered (and not validly withdrawn) at the Clearing Price on a prorated basis according to the principal amount of such Notes and all Notes accepted for purchase will be purchased at the Clearing Price.

All Notes not accepted on the Early Acceptance Date as a result of proration and all Notes tendered at prices in excess of the Clearing Price will be rejected from the Offer and will be returned to tendering holders at the Offerors' expense promptly following the earlier of the Expiration Date or the date on which the Offer is terminated.

If the Offer is not fully subscribed as of the Early Tender Date, all Notes validly tendered at or prior to the Early Tender Date may be accepted without proration, provided the conditions to the Offer are satisfied or waived by the Offerors. Any Notes validly tendered after the Early Tender Date and at or prior to the Expiration Date may be accepted subject to proration in accordance with the terms of the Offer in the event that the aggregate principal amount of all Notes tendered as of the Expiration Date would result in an aggregate payment amount that exceeds the Tender Cap.

If the Offerors exercise their right to elect following the Early Tender Date and prior to the Expiration Date to accept any Notes validly tendered (and not validly withdrawn) on the Early Acceptance Date, then the settlement of the Offer is expected to occur on November 4, 2020. If the Notes validly tendered (and not validly withdrawn) are accepted after the Expiration Date, then the settlement of the Offer is expected to occur on November 19, 2020.

The terms and conditions of the Offer are described in the Offer to Purchase. Questions regarding the Offer may be directed to J.P. Morgan Securities LLC at (866) 834-4666 (U.S. toll-free) and (212) 834-2045 (collect). Copies of the Offer to Purchase may be obtained from the Tender and Information Agent for the Offer, D.F. King & Co., Inc. at (877) 732-3614 (U.S. toll-free) and (212) 269-5550 (banks and brokers call).

This press release is for informational purposes only. This announcement does not constitute an offer to purchase or a solicitation of any offer to sell Notes or any other securities or a notice of redemption. The Offer is being made solely by the Offer to Purchase, dated October 20, 2020.

The Offer is not being made to holders of Notes 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. In any jurisdiction in which the securities laws or blue sky laws require the Offer to be made by a licensed broker or dealer, the Offers will be deemed to be made on behalf of the Offerors, as the case may be, by the dealer manager, or one or more registered brokers or dealers that are licensed under the laws of such jurisdiction.

About The Energy & Minerals Group

EMG has approximately $10 billion of regulatory assets under management and approximately $12 billion in commitments have been allocated across the energy sector since inception.

About First Reserve Management, L.P.

First Reserve has raised over $32 billion of aggregate capital since inception and completed approximately 700 transactions (including platform and add-on acquisitions). Its portfolio companies have operated on six continents spanning the energy spectrum from upstream natural gas and oil to midstream and downstream, including resources, equipment and services and associated infrastructure.

About Riverstone Holdings LLC

Riverstone is an energy and power-focused private investment firm with $41 billion of capital raised to date and the firm has committed over $41 billion to more than 195 investments in North America, South America, Europe, Africa, Asia and Australia.

This press release contains forward-looking statements within the meaning of U.S. federal securities laws. Forward-looking statements in this press release include, but are not limited to, statements regarding the anticipated pricing and timing of the Offer. These statements are not guarantees of future performance and are subject to known and unknown risks and uncertainties. Actual results may vary materially from those expressed or implied in this press release. These statements are made as of the date of this press release and the Offerors undertake no duty or obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Contact 

Matthew R. Pacey, P.C. 
Kirkland & Ellis LLP
(713) 836-3600
matt.pacey@kirkland.com

SOURCE Ascent Resources, LLC


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