Ascent Resources Utica Holdings Announces Commencement Of Exchange Offer And Consent Solicitation For Any And All Outstanding 10.0% Senior Notes Due 2022

OKLAHOMA CITY, Sept. 10, 2020 /PRNewswire/ -- Ascent Resources Utica Holdings, LLC ("Ascent", the "Company" or "our") today announced it, with its wholly-owned subsidiary, ARU Finance Corporation ("Finco"), has commenced an offer to each Eligible Holder (as defined below) of their 10.0% Senior Notes due 2022 (the "Old Notes") to exchange their Old Notes (the "Exchange Offer") pursuant to the options set forth below, in each case upon the terms and subject to the conditions set forth in the confidential offering memorandum and consent solicitation statement dated September 10, 2020 (the "Offering Documents").

The following table sets forth the consideration to be offered to Eligible Holders of the Old Notes in the Exchange Offer:

The maximum aggregate principal amount of New Term Loans to be issued to all Eligible Lenders that elect Option 1 will not exceed $538 million aggregate principal amount (the "Maximum Term Loan Exchange Amount"). The New Term Loans will be made pursuant to a term loan credit agreement, which is expected to be entered into on the Settlement Date (as defined below), by and among Ascent, as borrower, the guarantors party thereto, Wilmington Trust, National Association, as administrative agent and collateral agent, and the lenders party thereto (the "Term Loan Credit Agreement"). The New Notes will be issued pursuant to an indenture, by and among Ascent, Finco, the guarantors party thereto and Wilmington Trust, National Association, as trustee.

All New Term Loans will be issued before any New Notes are issued to Eligible Holders. In the event that the aggregate amount of New Term Loans to be issued in respect of Old Notes validly tendered (and not validly withdrawn) under Option 1 would exceed the Maximum Term Loan Exchange Amount, the amount of New Term Loans issued to each such tendering Eligible Lender will be equal to (a) the amount of New Debt entitled to be received by such Eligible Lender, based on the Early Exchange Consideration or Late Exchange Consideration (each as defined below), as applicable, in respect of Old Notes validly tendered (and not validly withdrawn) by such Eligible Lender pursuant to Option 1, multiplied by (b) the quotient of (1) the Maximum Term Loan Exchange Amount divided by (2) the aggregate principal amount of tendered Old Notes accepted by the Company pursuant to Option 1. If we accept Old Notes in exchange for New Term Loans on a prorated basis pursuant to Option 1, each applicable Eligible Lender's validly tendered Old Notes accepted for exchange for New Term Loans will be determined by multiplying each Eligible Lender's tender by the applicable proration factor, and rounding the product down to the nearest $1,000 principal amount. The portion of Old Notes tendered by each tendering Eligible Lender and accepted by the Company pursuant to Option 1 that are not exchanged for New Term Loans as a result of such proration will be exchanged for New Notes.

In conjunction with the Exchange Offer, the Company is soliciting consents (the "Consent Solicitation") from Eligible Holders (the "Consents") to certain proposed amendments to the indenture governing the Old Notes (the "Old Notes Indenture") to eliminate substantially all of the restrictive covenants and certain of the default provisions contained in the Old Notes Indenture (the "Proposed Amendments"). The Company must receive Consents by Eligible Holders representing a majority of the outstanding principal amount of Old Notes to adopt the Proposed Amendments (the "Requisite Consents"). Each Eligible Holder that tenders Old Notes into the Exchange Offer will be deemed to have given its Consent to the Proposed Amendments. Eligible Holders may not tender Old Notes without delivering the related Consents, and Eligible Holders may not deliver Consents without tendering the related Old Notes. Old Notes may not be withdrawn from the Exchange Offer and the Consents related to tendered Old Notes may not be revoked after the Withdrawal Deadline (as defined below), subject to applicable law.

The Company has entered into a Support and Investment Agreement dated September 10, 2020 with certain holders of Old Notes (the "Supporting Holders") that hold in aggregate approximately 60.6% of the outstanding principal amount thereof and certain existing direct and indirect equity investors, whereby all Old Notes held by Supporting Holders will be tendered in the Exchange Offer and Consent Solicitation. The Consents of the Supporting Holders will constitute the Requisite Consents.

Completion of the Exchange Offer is subject to the conditions set forth in the Offering Documents, including the condition that holders representing 85% of the outstanding principal amount of the Old Notes validly tender (and do not validly withdraw) such Old Notes on or prior to the Expiration Date (as defined below). The Company will not accept any tender of Old Notes that would result in the issuance of less than $2,000 principal amount of New Notes. If, under the terms of the Exchange Offer, a tendering Eligible Holder is entitled to receive New Notes in a principal amount that is not an integral multiple of $1,000, the Company will round downward such principal amount of New Notes to the nearest integral multiple of $1,000. This rounded amount will be the principal amount of New Notes that Eligible Holders will receive, and no additional cash will be paid in lieu of any principal amount of New Notes not received as a result of rounding down.

The Exchange Offer and Consent Solicitation will expire at 11:59 p.m., New York City time, on October 7, 2020 unless extended by the Company (such time and date, as the same may be extended, the "Expiration Date"). Subject to the conditions and the tender acceptance procedures set forth in the Offering Documents, (i) for each $1,000 principal amount of Old Notes validly tendered (and not validly withdrawn) at or prior to 5:00 p.m., New York City time, on September 23, 2020, unless extended (such time and date as it may be extended, the "Early Tender Date"), and accepted for exchange, Eligible Holders of Old Notes will be eligible to receive $1,000 principal amount of New Debt (the "Early Exchange Consideration"); and (ii) for each $1,000 principal amount of Old Notes validly tendered after the Early Tender Date and accepted for exchange, Eligible Holders of Old Notes will be eligible to receive $950 principal amount of New Debt (the "Late Exchange Consideration"); provided in each case that the New Debt issued to Eligible Holders that validly tender (and do not validly withdraw) Old Notes pursuant to Option 2 will not include any New Term Loans. Tenders of Old Notes pursuant to the Exchange Offer and Consents pursuant to the Consent Solicitation may be validly withdrawn at any time prior to 5:00 p.m., New York City time, on September 23, 2020 unless extended by the Company (such time and date, as the same may be extended, the "Withdrawal Deadline"), except as otherwise described in the Offering Documents. Subject to the terms and conditions of the Exchange Offer and Consent Solicitation, the settlement date for the Exchange Offer will occur promptly after the Expiration Date (the "Settlement Date") and is expected to occur on October 13, 2020.

The New Notes and the Exchange Offer have not been and will not be registered with the U.S. Securities and Exchange Commission under the Securities Act, or any state or foreign securities laws. The New Notes may not be offered or sold in the United States or for the account or benefit of any U.S. persons except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. The Exchange Offer and Consent Solicitation are not being made to Eligible Holders of Old 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. This press release is for informational purposes only and is not an offer to purchase or a solicitation of an offer to purchase or sell any securities, nor shall there be any sale of any securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

The Exchange Offer and the Consent Solicitation will only be made, and the New Notes and New Term Loans are only being made available to holders of Old Notes that are either (a) "qualified institutional buyers" as defined in Rule 144A under the Securities Act, (b) persons that are not "U.S. persons" as defined in Rule 902 under the Securities Act and are acquiring the New Notes and New Term Loans in offshore transactions in compliance with Regulation S under the Securities Act ("Regulation S") or (c) institutions where permitted in certain jurisdictions that can provide certifications and other documentation satisfactory to the Company that they are "accredited investors" as defined in subparagraphs (a)(1), (2), (3) or (7) of Rule 501 under the Securities Act (such holders, the "Eligible Holders"). Each holder that participates in the Exchange Offer and Consent Solicitation will be required to represent that it is an Eligible Holder, and each holder that elects to receive New Term Loans pursuant to Option 1 will be required to represent that it is an Eligible Lender. Eligible Holders and Eligible Lenders who desire to obtain and complete an eligibility letter should contact the information agent, D.F. King & Co., Inc., at (877) 732-3614 (toll-free) or (212) 269-5550 (for banks and brokers) or email [email protected] or access the website at www.dfking.com/ascentr.

Eligible Holders and Eligible Lenders are urged to carefully read the Offering Documents before making any decision with respect to the Exchange Offer and Consent Solicitation. None of the Company, the trustee with respect to the Old Notes, the arranger of the New Term Loans, the administrative agent with respect to the Term Loan Credit Agreement, the information agent or any affiliate of any of them makes any recommendation as to whether Eligible Holders and Eligible Lenders should tender their Old Notes in response to the Exchange Offer, and no one has been authorized by any of them to make such a recommendation. Eligible Holders and Eligible Lenders must make their own decision as to whether to participate in the tender of their Old Notes in response to the Exchange Offer and, if so, the principal amount of Old Notes for which an Eligible Holder or Eligible Lender would like to tender.

About Ascent Resources:
Ascent is the eighth largest producer of natural gas in the United States in terms of daily production and is focused on acquiring, developing, producing, and operating natural gas and oil properties located in the Utica Shale in Southeast Ohio. With a continued focus on good corporate citizenship, Ascent is committed to mitigating its environmental impact, while delivering low-cost, clean-burning, energy to our country and the world. For more information, visit www.ascentresources.com.

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 terms of the New Term Loans and New Notes, as well as, the anticipated settlement date of the Exchange 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 Ascent undertakes no duty or obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Contact:
James Short
Investor Relations
[email protected]

SOURCE Ascent Resources, LLC

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