Ascent Resources – Utica offers new notes, loans for 3.5% convertibles

New York, Jan. 21 – Ascent Resources – Utica, LLC announced it is offering new 3.5% convertible subordinated notes due 2021 and incremental junior secured loans due 2019 in a private exchange for its existing 3.5% convertible subordinated notes due 2019.

Holders who tender by the early deadline of 5 p.m. ET on Feb. 3 will receive for each $1,000 principal amount of the existing convertibles consideration of $50 principal amount of new junior secured loans plus an additional principal amount of new junior secured loans corresponding to 5% of any accrued interest on the existing convertibles and $950 principal amount of new convertible notes plus an additional principal amount of new convertibles corresponding to 95% of any accrued interest on the existing convertibles.

Those who tender after the early deadline but before the expiration of 11:59 p.m. ET on Feb. 18 will receive for each $1,000 principal amount of the convertibles plus the accrued interest, which the issuer has elected to pay in kind, consideration of $1,000 principal amount of the new convertibles plus an additional principal amount of new convertibles corresponding to the accrued interest.

Settlement is planned for three business days after the expiration date.

Completion of the exchange is subject to at least 90% of the existing convertibles being tendered, accession of participating holders to the existing junior secured term credit agreement and entry by participating holders into a subscription agreement for the new convertibles notes. Effectiveness of the subscription agreement is subject to a $212 million equity contribution to Ascent of which $177 million will be contributed by ARU Finance Corp. Participating holders will also need to enter into a rights agreement with the issuers.

Based on discussion with holders of the existing convertibles, the issuers expect at least 70% of the existing convertibles to be tendered.

The exchange is being conducted under Rule 144A and Regulation S.

Global Bondholder Services Corp. at (866 924-2200, 212 430-3774 or http://gbsc-usa.com/eligibility/Ascent_Resources) is exchange agent and information agent.

Ascent Resources – Utica was formerly known as American Energy – Utica, LLC and is an oil and gas company operating in the Utica Shale area of Ohio. ARU Finance was formerly known as AEU Finance Corp. Together they are the issuers and both are subsidiaries of Oklahoma City-based Ascent Resources, LLC, formerly known as American Energy Appalachia Holdings, LLC and 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), which respectively own Ascent Resources – Utica, LLC and Ascent Resources – Marcellus, LLC (formerly known as American Energy – Marcellus, LLC).

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