American Energy -- Permian Basin, LLC Announces Completion of $295 Million Offering of 8.00% Senior Secured Second Lien Notes

OKLAHOMA CITY, June 4, 2015 /PRNewswire/ -- American Energy – Permian Basin, LLC (AEPB), an affiliate of American Energy Partners, LP, announced today the completion of its offering of $295 million of 8.00% Senior Secured Second Lien Notes due 2020 (Notes) in an unregistered offering to institutional investors.  The net proceeds from the offering of the Notes, which were approximately $290 million, will be used by AEPB to repay a portion of the borrowings currently outstanding under its revolving credit facility. 

Jeffrey L. Mobley, AEPB's Chief Financial Officer, commented, "We are pleased to announce the closing of another very successful transaction for our company.  This transaction provides AEPB with enhanced liquidity at a very attractive cost and will enable us to continue executing our business plan while also maintaining flexibility to capitalize on opportunities and potentially accelerate drilling activity if oil and natural gas prices further improve.  As we achieve anticipated growth in production and proved reserves in the quarters ahead, we expect the company's liquidity to further increase through cash flow growth and positive borrowing base redeterminations under our revolving credit facility." 

Aubrey K. McClendon, AEPB's Chief Executive Officer, commented, "This transaction enhances the financial strength of our company and demonstrates market confidence in the quality of our Permian Basin assets and operations.  I am proud of the responsiveness of the AEPB management team to challenging market conditions during the last eight months and their success in preserving attractive profit margins and investment returns through improved operational efficiencies and significant capital and operating cost improvements.  Since the fall of 2014, we have achieved an approximate 40% reduction in well costs and, during the 2015 first quarter, we generated production growth of 114% year over year and 16% sequentially.  We are targeting to deliver average daily production of approximately of 21,000 to 24,000 barrels of oil equivalent for the 2015 full year, an increase of approximately 85% to 110% year over year.  I look forward to watching this company continue to deliver strong performance in the months and years ahead."

Goldman, Sachs & Co. and Credit Suisse acted as joint global coordinators and joint book-running managers for the notes offering. BofA Merrill Lynch, Morgan Stanley and Wells Fargo Securities also acted as joint book-running managers for the offering.  Sullivan & Cromwell LLP acted as legal advisor to AEPB in connection with the notes offering and Latham & Watkins LLP acted as legal advisor to the initial purchasers.

This press release contains forward-looking statements. Forward-looking statements express views regarding future plans and expectations. They include statements that include words such as "may," "could," "would," "should," "believe," "expect," "anticipate," "plan," "estimate," "target," "project," "intend" and similar words or expressions, although not all forward-looking statements contain such identifying words.

Forward-looking statements in this press release include, but are not limited to, statements regarding future operations and operating costs, business strategy, future values of anticipated reserves and future production. These statements are based on numerous assumptions and are subject to known and unknown risks and uncertainties, many of which are beyond our control. These risks include, but are not limited to, commodity price volatility, inflation, lack of availability of drilling and production equipment and services, environmental risks, drilling and other operating risks, regulatory changes and the uncertainty inherent in estimating oil and natural gas reserves and in projecting future rates of production, cash flow and access to capital. Actual future results may vary materially from those expressed or implied in these forward-looking statements, and AEPB's business, financial condition and results of operations could be materially and adversely affected by numerous factors, including such known and unknown risks and uncertainties. As a result, forward looking statements should be understood to be only predictions and statements of our current beliefs, and not as guarantees of performance.  Forward looking statements speak only as of the date hereof, and we undertake no obligation to update any forward looking statements.

All of the forward-looking statements in this press release are qualified by risks, including those risks related to our ability to: complete acquisitions and successfully transition acquired businesses and assets to the management and control of AEPB; access the capital markets on terms acceptable to us or at all; execute on future drilling plans; hold our leasehold by production and convert reserves into production on an economic basis; manage rapid growth; to realize attractive oil, NGLs and natural gas prices; develop a successful marketing plan for the oil, NGLs and natural gas produced by AEPB; successfully identify and acquire additional productive leasehold; recruit and retain appropriately qualified personnel; effectively utilize technology, to execute our drilling program; obtain sufficient time and attention of AEPB Services, LLC, which manages AEPB's business; mitigate credit risk posed by significant customers; respond to intense competition in the onshore E&P industry; respond to shifting and increasing government regulatory requirements with respect to unconventional resource recovery, including hydraulic fracture stimulation; accurately predict the timing of infrastructure development (including long-haul pipelines) and tie-in of wells; accurately predict the timing and amount of future production of oil, NGLs and natural gas; access water, sourcing, distribution and disposal systems; generate sufficient cash flow to pay fixed charges; control our operating expenses and other costs; execute on our financial strategy and access the capital required for our development program; implement our hedging strategy and deliver expected results; navigate through general credit market and economic conditions; and to avoid material legal or environmental liabilities.

The Notes have not been and will not be registered under the Securities Act of 1933, as amended (Securities Act), or the securities laws of any other state or jurisdiction, and may not be offered or sold without registration or an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable securities laws. This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful.

About American Energy – Permian Basin, LLC:

American Energy – Permian Basin, LLC is an independent oil and natural gas company affiliated with American Energy Partners, LP focused on the acquisition, development and production of unconventional oil and natural gas reserves in the Wolfcamp Shale play in Central Midland Basin of the Permian Basin in West Texas.

About American Energy Partners, LP:

American Energy Partners, LP was founded by Aubrey K. McClendon in April 2013 to capitalize on opportunities available in unconventional resource plays.  

SOURCE American Energy -- Permian Basin, LLC