Approach Resources Inc. agreed to reduce its long-term debt by up to $230.3 million through exchange transactions, which were approved by its board, the company said Nov. 2.

The transactions would generate up to $70 million in future interest savings and enhance liquidity, provide flexibility to increase the capital budget out of operating cash flow, remove certain restrictive covenants from the existing senior notes indenture, and align Approach Resources with an investor in an integrated oilfield service business.

An exchange agreement was entered with Wilks Brothers LLC and SDW Investments LLC (together, Wilks). These entities are the investment division of the Wilks Family Office and are collectively the largest holder of Approach Resources’ 7.00% notes due 2021. The Wilks Family Office is based in Cisco, Texas, and holds public and private market investments across E&P, energy and other sectors.

Under the agreement, about $130.5 million of the notes will be exchanged for about 39.16 million new common shares. Accrued unpaid interest on the notes held by Wilks will be paid in cash at the closing of the initial exchange.

Immediately following the closing of the initial exchange, Wilks will hold about 48.6% of Approach Resources’ outstanding common stock.

Approach Resources expects that the initial exchange will close, and that the follow-on exchange will begin, in first-quarter 2017.

J. Ross Craft, chairman and CEO of Approach Resources, said the company could save $16.1 million in annual interest payments and up to $70 million in interest payments over the life of the senior notes.