Ascent Resources LLC has entered into agreements to sell 2.2 billion common units in a private placement transaction, which is expected to result in net proceeds to Ascent of $500 million, bringing the total amount of equity raised by Ascent so far in 2016 to $712 million.
The common units will be sold to the investors at a purchase price of $0.224 per common unit. The proceeds of the sale are expected to be funded on or about March 24, and Ascent is expected to contribute $500 million in net cash proceeds to Ascent Resources – Utica LLC (ARU) within three business days of the funding date.
Upon the completion of the contribution, ARU and ARU Finance Corp. will have satisfied the conditions necessary to exercise their right to redeem their outstanding 3.50% convertible subordinated notes due 2021 issued on Feb. 24 for incremental junior secured loans due 2019 and common units and/or the Class A shares of a newly formed entity. The redemption is expected to take place no earlier than 30 days and no later than 60 days following the funding date.
Ascent Resources was created in December 2014 through the combination of Ascent Resources Utica Holdings LLC (formerly known as American Energy Ohio Holdings LLC) and Ascent Resources Marcellus Holdings LLC (formerly known as American Energy Marcellus Holdings LLC), which respectively own Ascent Resources – Utica LLC and Ascent Resources – Marcellus LLC (formerly known as American Energy – Marcellus LLC). Since its inception, Ascent Resources LLC has established a leading position in the Appalachian Basin, with approximately 280,000 net acres purchased or under contract.