ANTERO RESOURCES CORPORATION (NYSE:AR) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement.
Voting Agreement Amendment.
On March11, 2019, AMGP and Antero Resources Corporation (“Antero Resources”) entered into Amendment No.1 to the Voting Agreement, dated as of October9, 2018, by and between AMGP and Antero Resources to provide that Antero Resources would transfer certain common units representing limited partner interests in Antero Midstream to a wholly owned subsidiary prior to the Closing (the “Voting Agreement Amendment”).
The foregoing description of the Voting Agreement Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Voting Agreement Amendment, a copy of which is filed with this Current Report on Form8-K as Exhibit10.1 and is incorporated herein by reference.
Registration Rights Agreement.
In connection with the Closing, New AM entered into a Registration Rights Agreement (the “Registration Rights Agreement”), dated as of March12, 2019, with Antero Resources, Antero Subsidiary Holdings LLC (f/k/a Arkrose Subsidiary Holdings LLC) (a wholly owned subsidiary of Antero Resources), certain members of management, certain funds affiliated with Warburg Pincus LLC, certain funds affiliated with Yorktown Partners LLC and former holders of the SeriesB Units representing limited liability company interests of IDR Holdings (collectively, the “Registration Rights Holders”), to which New AM agreed to register the resale of certain shares of common stock of New AM, par value $0.01 per share (“New AM Common Stock”), received by the Registration Rights Holders in the transactions to the Simplification Agreement (the “Transactions”), under certain circumstances, as described below.
to the Registration Rights Agreement, New AM will use its reasonable best efforts to (i)prepare and file a registration statement under the Securities Act of 1933, as amended (the “Securities Act”), to permit the resale of the Registrable Securities (as defined in the Registration Rights Agreement) from time to time as permitted by Rule415 of the Securities Act (or any similar provision adopted by the Securities and Exchange Commission then in effect) (the “Resale Registration Statement”) as soon as practicable, but in no event more than 30 days following the Closing and (ii)cause the Resale Registration Statement to become effective no later than 60 days after filing thereof. Except in certain circumstances, Sponsor Holders (as defined in the Registration Rights Agreement) owning at least three (3%) percent of the issued and outstanding shares of New AM Common Stock have the right to require New AM to facilitate an underwritten offering. New AM is not obligated to effect any demand registration in which the anticipated aggregate offering price included in such offering is less than $50,000,000. Sponsor Holders will also have customary piggyback registration rights to participate in underwritten offerings.
A Registration Rights Holder’s registration rights will expire at such time that such Registration Rights Holder no longer owns any Registrable Securities.
The foregoing description of the Registration Rights Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Registration Rights Agreement, a copy of which is filed with this Current Report on Form8-K as Exhibit10.2 and is incorporated herein by reference.
Item 2.01 Completion of Acquisition or Disposition of Assets.
On March12, 2019, AMGP and Antero Midstream completed the Transactions. to the Simplification Agreement, (i)AMGP was converted from a limited partnership to a corporation under the laws of the State of Delaware, and its name was changed to Antero Midstream Corporation and (ii)an indirect, wholly owned subsidiary of New AM was merged with and into Antero Midstream, with Antero Midstream surviving the merger as an indirect, wholly owned subsidiary of New AM. In connection with the Closing, Antero Resources received $297 in cash and 158.4 million shares of New AM’s common stock, par value $0.01 per share, in exchange for the 98,870,335 common units representing limited partner interests in Antero Midstream owned by Antero Resources immediately prior to the Closing.
Prior to the Closing, Antero Resources’ ownership of Antero Midstream common units represented approximately a 53% limited partner interest in Antero Midstream, and Antero Resources consolidated Antero Midstream’s financial position and results of operations into Antero Resources’ consolidated financial statements. After the Closing, Antero Resources owns approximately 31% of the common stock of New AM, and as a result, Antero Resources prospectively will no longer consolidate Antero Midstream in its consolidated financial statements and will account for its interest in New AM using the equity method of accounting starting with its financial statements for the first quarter of 2019.
Item 7.01 Regulation FD Disclosure.
On March13, 2019, Antero Resources issued a press release announcing the Closing and the deconsolidation of Antero Midstream from its financial statements. A copy of the press release is furnished as Exhibit99.1 to this Current Report and is incorporated herein by reference.
The information furnished in this Item 7.01 (including Exhibit99.1) shall not be deemed “filed” for purposes of Section18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act, regardless of any general incorporation language in such filing, except as shall be expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
This Current Report on Form8-K includes unaudited pro forma condensed consolidated financial statements of Antero Resources, which have been derived from the historical consolidated financial statements of Antero Resources, adjusted to reflect the deconsolidation of Antero Midstream as a result of the Closing. Antero Resources determined that upon Closing, Antero Resources no longer holds a controlling financial interest in Antero Midstream through the existing long-term contractual agreements with Antero Midstream, or otherwise. As a result, Antero Resources prospectively will no longer consolidate Antero Midstream in its financial statements and will account for its interest in New AM using the equity method of accounting, as reflected in the unaudited pro forma condensed consolidated financial statements. The pro forma adjustments are based upon currently available information and certain estimates and assumptions; therefore, actual results may differ from the pro forma adjustments. Antero Resources believes, however, that the assumptions provide a reasonable basis for presenting the
ANTERO RESOURCES Corp Exhibit
EX-10.1 2 a19-4455_6ex10d1.htm EX-10.1 Exhibit 10.1 AMENDMENT NO. 1 TO VOTING AGREEMENT This Amendment No. 1 (this Amendment) to the Voting Agreement (as defined below),…
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About ANTERO RESOURCES CORPORATION (NYSE:AR)
Antero Resources Corporation is an oil and natural gas company. The Company is engaged in the exploration, development and acquisition of natural gas, natural gas liquids (NGLs) and oil properties located in the Appalachian Basin. The Company’s segments include the exploration, development and production of natural gas, NGLs, and oil; gathering and compression; water handling and treatment, and marketing of excess firm transportation capacity. The Company’s exploration and development activities are supported by the natural gas gathering and compression assets of its subsidiary, Antero Midstream Partners LP (Antero Midstream), as well as by third-party gathering, compression, processing and transportation arrangements. The Company owns over two independent fresh water distribution systems that distribute fresh water from the Ohio River and several regional water sources for well completion operations in the Marcellus and Utica Shales.