Drilling Down

Ascent Resources’ Marcellus Subsidiary Files Chapter 11

OKLAHOMA CITY – An entity founded by the late oil and gas wildcatter Aubrey McClendon has filed for bankruptcy to restructure its long-term debt.

Ascent Resources Marcellus Holdings and its affiliated companies filed for protection under Chapter 11 of the U.S. Bankruptcy Code in U.S. Bankruptcy Court for the District of Delaware Tuesday, the company said in a press release.

The filing affects Ascent Resources Marcellus’ position in northern West Virginia, which encompasses about 43,000 acres.

Ascent Marcellus’ debt is estimated at about $1 billion, and the company expects it to be in Chapter 11 for 45 to 60 days. The company and its subsidiaries were formed to acquire, explore for, develop, produce and operate natural gas and oil properties in the Marcellus shale.

“Vendors and service providers will not be impaired by the restructuring and will be paid in the ordinary course of business,” the release said.

McClendon established Ascent Resources in 2013 shortly after he was ousted as chairman of Chesapeake Energy Corp. McClendon was killed in a car crash on March 2, 2016, just one day after he was indicted on federal charges for allegedly fixing bids on oil and gas leases.

Under McClendon, Chesapeake Energy emerged as one of the country’s largest producers of natural gas. In 2010, Chesapeake was among the first energy companies to stake leasehold positions in eastern Ohio’s Utica shale, which has since yielded trillions of cubic feet of natural gas for energy producers.

Ascent is very active in the Utica too, but those positions are not affected by the bankruptcy since the Marcellus and Utica operations are separate entities with distinct capital structures, the release said.

Published by The Business Journal, Youngstown, Ohio.