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Subsequent Events
12 Months Ended
Dec. 31, 2014
Subsequent Events [Abstract]  
Subsequent Events

NOTE 19—SUBSEQUENT EVENTS

On April 3, 2015, we and our wholly owned subsidiaries American Shale and Prima, along with Republic Energy Ventures, LLC, Republic Partners VIII, LLC, Republic Partners VI, LP, Republic Partners VII, LLC, and Republic Energy Operating, LLC (collectively, the “Sellers”) entered into a Purchase and Sale Agreement (the “PSA”), pursuant to which the Sellers agreed to sell certain interests located in Wetzel County, West Virginia, including 5,159 net acres held by the Company and the Company’s interest in twelve Marcellus producing wellbores, to TH Exploration, LLC (“Buyer”). The Company expects to receive approximately $47.0 million at closing, net of funds used to repurchase assets that are to be included in the sale. The Company expects it will ultimately receive approximately $71.3 million in connection with the sale of its assets and the overriding royalty interests that are to be repurchased and included in the sale. The incremental funds are expected to be received upon the successful resolution of certain quiet title actions that are currently ongoing and the release of funds that will be held in escrow for a time following the closing.

The PSA contains customary representations, warranties and indemnities among the parties and the closing contemplated by the PSA is subject to the satisfaction of certain customary conditions as described therein. Additionally, the PSA provides Buyer with the opportunity to terminate the agreement and receive its deposit plus reimbursement for diligence expenses in the event that certain conditions are not met. There can be no assurance at this time that all of the conditions may be satisfied.

The sale of the Assets pursuant to the PSA is scheduled to close within approximately ninety days after the signing of the PSA and is to be effective as of October 1, 2014.

 

The foregoing descriptions of the PSA and the consideration payable hereunder do not purport to be complete and are qualified in their entirety by reference to the complete text of the PSA, a copy of which will be attached as an exhibit to the Company’s Form 10-Q for the period ending June 30, 2015.

On April 27, 2015, our wholly owned subsidiary, American Shale entered into a consent and agreement (the “Consent and Agreement”) that amended the credit agreement dated May 21, 2014 and the associated NPI agreement by and among American Shale, several other financial institutions parties thereto as lenders, and Morgan Stanley Capital Group Inc. as the administrative agent. The Consent and Agreement reduced the contingent borrowing availability under the Tranche B facility from $47.5 million to $10.0 million, and eliminated the Tranche C facility. Potential borrowings under the Tranche B facility had been contingent on American Shale’s ability to meet certain levels of PV-9 value for its producing properties, and as such there was no additional availability under Tranche B as of the signing of the Consent and Agreement. There were no other changes to the terms of the Tranche A facility loans under the credit agreement. The NPI agreement was amended to set the contingent NPI percentage at approximately 2.53%.

Under the Consent and Agreement, the administrative agent also consented to the monetization of a portion of American Shale’s natural gas hedges and the disposition of a portion of American Shale’s working and net revenue interests in wells in Marion County, West Virginia (the “Working Interests”) that have been recently drilled but not completed.

On the same date, American Shale entered into an agreement with Republic Energy Operating, LLC. Under this agreement, American Shale agreed to use the proceeds from the aforementioned hedge monetization as well as the sale of the Working Interests to pay all amounts due under the March 2015 joint interest billing statement in the amount of approximately $13.8 million provided by Republic Energy Operating, LLC. American Shale reserves the option to reacquire the Working Interests pursuant to a notice of election at agreed upon prices set forth in the agreement.