$Approach资源(AREX)$ Approach Resources' Bondholders Demonstrate Stock Is A Steal And The Board Is Too Passive
Jan. 30, 2017 4:59 PM • AREX
Summary
Wilks Family Office, a major bondholder agreed to exchange their debt for equity. This (combined with some company payments) eliminated about 30% of the long term debt.
A second exchange offer is in the works to other bondholders that would eliminate about another $90 million or so long term debt if successful.
A rough enterprise value of $650 million values the 138,000 Permian acreage position at a dirt cheap less than $5,000 per acre.
The Wilks family will have three new board members on the board which will now grow to 8 members.
The increase in liquidity would lead to an expansion of operations using industry leading low costs. That could cause the stock to explode upwards.
Sometimes management keeps hoping that the present atmosphere goes away and nirvana turns up. Then everyone can live happily ever after with money rolling in the door. In this case the bondholders for Approach Resources (NASDAQ:AREX) had other ideas.