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, the Debtors have considered, among other things, sales
of all or substantially all of their assets pursuant to Section 363 of the
Bankruptcy Code. In February 2020, the Company and certain of the Filing
Subsidiaries entered into an asset purchase agreement (the "Alpine APA") with
Alpine Energy Acquisitions, LLC ("Alpine"); however, also as previously
disclosed, the Alpine APA was not consummated and the parties ultimately entered
into a Global Compromise Settlement Agreement and Mutual General Release (the
"Settlement Agreement") that resulted in the termination of the Alpine APA. The
Settlement Agreement was approved by the Court on July 2, 2020.
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 has agreed to sell substantially
all of the Debtors' assets, (the "Assets," and such sale, the "Asset Sale") for
$115.5 million, subject to certain customary purchase price adjustments as set
forth in the APA (the "Purchase Price"). Simultaneously with the execution of
the APA, Zarvona deposited $11.55 million into escrow, and upon the closing of
the transactions contemplated by the APA, such deposit will be released to the
Seller and credited against the Purchase Price. The APA is subject to Court
approval.
The foregoing description of the APA does not purport to be complete and is
qualified in its entirety by reference to the APA, which has been filed with the
Court and is attached hereto as Exhibit 2.1 and incorporated herein by
reference.
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 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
* 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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