Summary
Diamondback Energy, Inc. (FANG) has filed an amendment to its Form 8-K to provide further details regarding a significant asset acquisition that closed on September 19, 2013. The company acquired mineral interests spanning approximately 15,000 gross (12,500 net) acres in Midland County, Texas, within the prolific Permian Basin, for a cash purchase price of $440.0 million. This acquisition was funded through the proceeds of a 7.625% Senior Notes offering due 2021. Notably, the company has determined that this transaction constitutes an acquisition of assets rather than a business, and therefore, has concluded that no pre-acquisition financial statements under Rule 3-05 or pro forma financial statements under Article 11 of Regulation S-X are required. While the sellers provided revenue information for the acquired mineral interests for periods prior to the acquisition, this data has not been audited or reviewed and should be viewed with caution regarding its representativeness for future periods due to various influencing factors.
Key Highlights
- 1Completed acquisition of approximately 15,000 gross (12,500 net) acres of mineral interests in Midland County, Texas, for $440.0 million.
- 2The acquired acreage is located in the Permian Basin, a highly prospective oil and gas region.
- 3Diamondback Energy will operate approximately 50% of the acreage associated with these mineral interests.
- 4The acquisition was funded by the proceeds from a 7.625% Senior Notes offering due 2021.
- 5The company classified the acquisition as an asset purchase, not a business combination, thus exempting it from filing extensive pre-acquisition financial statements.
- 6Provided unaudited historical revenue data for the acquired mineral interests: $21.3 million (2011), $24.6 million (2012), and $18.2 million (first six months of 2013).
- 7Disclosed that the provided historical revenue information is unaudited and may not be representative of future results.