Finance - Debt
Investors are concerned that producers will be unable to keep savings they say are tied to efficiency improvements as service companies begin to assert themselves after two years of discounts.
The company will swap equity for debt forgiveness, and partners such as Nabors Industries will see a vastly reduced stake in the company.
The net proceeds will repay debts under the revolving credit agreement.
John Vollmer, CFO, said that the company does not have any term debt maturities until October 2020 because the two bank term loans have been repaid.
The next borrowing base review is scheduled to occur by Nov. 30.
Any remaining proceeds will repay outstanding revolving credit facility borrowings.
BofA Merrill Lynch, J.P. Morgan and SunTrust Robinson Humphrey are representatives and joint book-running managers.
Comerica Securities Inc. and DNB Markets Inc. are co-managers.
Deutsche Bank Securities Inc., Mizuho Securities USA Inc. , Barclays Capital Inc. , Citigroup Global Markets Inc. , PNC Capital Markets LLC , TD Securities (USA) LLC and Wells Fargo Securities LLC are joint book-running managers.
Tom Stabley, president and CEO, said that the reaffirmed borrowing base will help Rex Energy toward its goal of having core acreage in the Appalachian Basin HBP.
Energean said there is also potential from ongoing exploration activity in the onshore Ioannina and offshore Katakolon blocks in western Greece, Reuters reported.
A tight pre-bankruptcy process is the key to ultimately having a successful reorganization.