Ascent Resources LLC has agreed to sell approximately 3.5 billion common units in a private placement transaction, which is expected to result in net proceeds of approximately $787 million.
Upon closing, Ascent will contribute $175 million of proceeds from the private placement to Ascent Resources – Utica LLC (ARU) to fund ARU's ongoing Utica natural gas and oil development program in Ohio. The company also plans to use approximately $479 million to prepay in full the Junior Lien Term Loans outstanding under ARU's Amended and Restated Credit Agreement dated as of January 21, 2016 pursuant to a pre-existing agreement regarding such repurchase for a combination of cash and equity. The closing of the prepayment of the Junior Lien Term Loan Facility is scheduled for November 15, 2016. The remaining $132 million of proceeds from the transaction will be used to further Utica development, liability management purposes or capital structure optimization.
"This brings the total amount of common equity we have successfully raised in 2016 to $1.5 billion, and as of November 15, 2016 we will have reduced ARU's outstanding balance sheet debt by more than $1.9 billion this year,” said Ascent Chairman and CEO Jeffrey A. Fisher.