American Energy Appalachia Holdings LLC is changing its name to Ascent Resources LLC and is transitioning to a stand-alone operating company, fully independent of the broader American Energy Partners LP (AELP) platform, a process that has been contemplated since the company's founding in September 2013 and that it expects to complete by year’s end.
The primary equity owners of Ascent will be unchanged. Further, one of Ascent's two operating subsidiaries, American Energy – Utica LLC (AEU), has agreed to sell 35,000 net acres and certain associated gathering assets to Gulfport Energy Corp. (NASDAQ: GPOR) for $407 million and has completed a combined equity and debt financing of $977 million.
The combined proceeds of $1.4 billion will provide the company with $700 million of immediate liquidity after repaying certain existing debt. Ascent plans to deploy this capital for ongoing development of its assets.
The $977 million financing consists of $250 million of equity invested by affiliates of The Energy & Minerals Group (EMG), First Reserve, and Aubrey K. McClendon, as well as $250 million of senior secured debt, $200 million of which will be used to retire AEU's revolving credit facility, and $477 million of junior secured debt, $277 million of which will be used to retire an equal amount of AEU's existing convertible notes. The asset sale consists of 35,000 net acres in Belmont, Monroe, and Jefferson counties, Ohio, that were not scheduled for near-term development by the company and are a better fit for Gulfport's planned development activities.
Pro forma for the asset sale, Ascent had estimated proved reserves of 1.8 trillion cubic feet equivalent (73% natural gas) as of March 31, and 235,000 net acres in the Utica and Marcellus shale plays in Ohio and West Virginia. Ascent's current estimated daily production is 280 million cubic feet equivalent.