Stone Energy (NYSE: SGY) is talking to potential buyers for its Marcellus assets as it attempts to back into a possible bankruptcy filling with a restructuring agreement in place among its creditors.

The Layfette, La.-based company plans to sell its Appalachian assets to an unrelated third party for a net price of $350 million, according to Securities and Exchange Commission filings. Previous market tests indicated that Stone Energy’s assets could fetch a sales price ranging from $250 million to $400 million, depending on commodity prices.

Under the company’s plan, $150 million from the net proceeds—about 43%—would be paid to noteholders. The remaining money would be used to pay bank debt and to fund working capital needs. If the Appalachia assets sell for more than $350 million, noteholders would receive 60% of the proceeds.

Stone Energy’s Marcellus resource potential is sizeable, but drilling and completion were suspended in September 2015 as commodity prices soured and only recently restarted.

Stone said it had 35,000 net acres prospective for the Utica Shale with more than 200 potential well locations.

The company’s 2014 year-end proved reserves were estimated at 526 billion cubic feet equivalent (Bcfe) and probable and possible reserves at 531 Bcfe. As of December, the company had 250 potential locations but had suspended drilling and completion.

At the end of June, the company resumed production in the Marcellus’ Mary Field after renegotiating a midstream contract with Williams Cos. Inc. (NYSE: WMB). The field averaged more than 75 MMcfe/d in July, and total Appalachia volumes averaged 95 MMcfe/d, the company said in early August.

Production rates were expected to reach more than 125 MMcfe/d in the third quarter. However, due to capital constraints, Stone said it would limit its Appalachian activities in 2016 to maintain production and core leasehold interests.

Operators in the Permian and Appalachian basins have generally been perceived by analysts to be in good positions to survive the downturn through spending cuts, asset sales and borrowing or equity raises. In April, Stone was stung by a borrowing base redetermination that reduced its credit to $300 million from $500 million. The company began making payments on the $175.3 million deficiency and renegotiated its credit agreement in June.

As of Aug. 2, the company had $165.5 million cash.

Stone reported a second-quarter 2016 net loss of $195.8 million, or $35.05 per share on oil and gas revenue of $89 million, compared to a net loss of $152.9 million in second-quarter 2015.

Overall in second-quarter 2016, Stone Energy’s production mix was about 59% oil, 32% natural gas and 9% NGLs. About 138 MMcfe/d was produced in the Gulf of Mexico .

In March, Stone said it had retained Lazard as its financial adviser and Latham & Watkins LLP as its legal adviser to assist in analyzing and considering financial, transactional and strategic alternatives.

Darren Barbee can be reached at dbarbee@hartenergy.com.