February 7, 2018 / 12:38 AM / 13 days ago

McClendon-founded Ascent Resources Marcellus files for Chapter 11 bankruptcy

(Reuters) - Ascent Resources Marcellus Holdings LLC, a shale driller founded by the late U.S. fracking pioneer Aubrey McClendon, said on Tuesday it had filed for Chapter 11 bankruptcy as part of a negotiated plan with lenders to reduce about $1 billion of debt and boost liquidity.

Privately held Ascent is one of several energy companies McClendon launched after he was ousted in 2013 during a corporate governance crisis from Chesapeake Energy Corp, which he had founded and built into one of the largest U.S. shale drillers.

McClendon died in a single-vehicle collision on March 2, 2016, a day after he was indicted along with other unnamed co-conspirators on federal charges of bid-rigging.

The filing in the U.S. Bankruptcy Court in Wilmington, Delaware, is for Ascent’s Marcellus formations, which own development rights on some 43,000 acres in West Virginia, and has no impact on its Utica play in Ohio, the company said in a news release.

The Marcellus and Utica formations are owned by entities with separate capital structures, it said.

More than 100 North American oil and gas producers have entered bankruptcy since early 2015, according to the Haynes and Boone law firm, as a fall in commodity prices crippled their ability to service debt and invest in their operations.

Oklahoma City, Oklahoma-based Ascent said it expects to be in Chapter 11 for approximately 45 to 60 days, noting that a majority of its first and second lien lenders have already voted to accept its restructuring plan.

The company owes $708 million on a first lien and $348 million on a second lien loan, a company spokeswoman said.

Ascent plans to form a new board of directors upon its Chapter 11 emergence, though its existing management team would continue to manage day-to-day operations, it said, and added that its vendors and service providers would not be impaired by the restructuring.

The case is In re Ascent Resources - Marcellus, LLC in U.S. District Court for the District of Delaware, No. 18-10266.

(The headline of this story has been corrected to show that it is Ascent Resources Marcellus that filed for bankruptcy and not Ascent Resources Utica)

Reporting by Tracy Rucinski in Chicago; Additional reporting by Jessica DiNapoli in New York; Editing by Matthew Lewis

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