Forbes Energy Services Ltd. (OTCMKTS:FESL) Files An 8-K Entry into a Material Definitive Agreement

On February 3, 2020, Forbes Energy Services Ltd. (“Forbes”) and certain of its subsidiaries entered into the Second Amendment to the existing Credit Agreement (the “Amendment”), which amended the Credit Agreement, dated as of November 16, 2018, by and among Forbes, the subsidiaries of Forbes identified therein as borrowers, and Regions Bank, as Administrative Agent and Lender (the “Credit Agreement”). The Amendment amended the Credit Agreement, effective as of December 31, 2019, to provide that (i) the fixed charge coverage ratio financial covenant will not be tested for each of the months ending December 31, 2019 through June 30, 2020 and (ii) during the period from December 1, 2019 through the date that financial statements are delivered for the fiscal month ending July 31, 2020, “excess availability” under the Credit Agreement shall equal $2,500,000 or more.

Item 8.01 – Other Events.

On January 29, 2020, a well control incident occurred on a producing well in Burleson County, Texas operated by Chesapeake Operating LLC (“Chesapeake”), a subsidiary of Chesapeake Energy, during a workover operation. Forbes Energy Services LLC, a subsidiary of Forbes, was one of several independent contractors engaged to perform the workover operation. The incident resulted in one injured and three fatalities, one of which was a Forbes employee. Forbes is cooperating with regulatory agencies investigating this incident. At this time, a lawsuit captioned Linda Milanovich v. Chesapeake Operating, L.L.C. and Chesapeake Energy Corporation has been filed in the District Court of Burleson County, Texas. Each of Chesapeake and Forbes has asserted indemnification claims against the other in this lawsuit. Forbes has also asserted claims against Eagle PCO, LLC, one of the independent contractors. Forbes anticipates that additional lawsuits will be brought on behalf of deceased and injured parties. Forbes does not currently expect claims related to this incident, individually or in the aggregate, to have a material impact on Forbes’ financial position or results of operations.