AREX - Approach Resources: Notes And Equity Likely Worthless In Bankruptcy
Approach Resources (AREX) filed for bankruptcy recently after a string of amendments to its limited forbearance agreement. It received $16.5 million in new money DIP financing, and I would be surprised if there is any value left for its unsecured bonds.
Approach's wells simply do not perform well enough to provide competitive returns when natural gas and NGL prices are low. Its secured debt is also significantly more than the value of its PDP reserves at current commodity prices.
Well-Level Economics
While Approach has boosted its type curve EURs and reduced its well