8-KMaterial AgreementsRegulation FDOther Events+1

Diamondback Energy, Inc. 8-K Report, Material Agreement (Feb 26, 2014)

Filed February 26, 2014For Securities:FANG

Summary

Diamondback Energy, Inc. (FANG) has filed an 8-K detailing a significant equity offering that closed on February 26, 2014. The company successfully offered 3,000,000 shares of common stock at $62.67 per share, with underwriters exercising their option to purchase an additional 450,000 shares. The total gross proceeds from this offering were approximately $211 million. These proceeds, along with potential borrowings from its revolving credit facility, are earmarked for strategic acquisitions of additional acreage in Martin County, Texas, within the Permian Basin. In the event these acquisitions do not materialize, the funds will be allocated to exploration and development activities and general corporate purposes. This offering demonstrates Diamondback Energy's proactive approach to funding growth initiatives and expanding its operational footprint in a key shale play.

Key Highlights

  • 1Completion of a public offering of 3,000,000 shares of common stock at $62.67 per share.
  • 2Underwriters exercised their option to purchase an additional 450,000 shares, bringing the total shares sold to 3,450,000.
  • 3Total gross proceeds from the offering amounted to approximately $211 million.
  • 4Net proceeds are intended to fund previously announced acquisitions of acreage in Martin County, Texas (Permian Basin).
  • 5Funds will support exploration and development or general corporate purposes if acquisitions are not consummated.
  • 6The offering was conducted under an effective automatic shelf registration statement on Form S-3.
  • 7The Underwriting Agreement contains standard representations, warranties, indemnification clauses, and termination provisions.

Frequently Asked Questions

The primary purpose of the stock offering was to raise capital to fund Diamondback Energy's previously announced acquisitions of additional acreage in Martin County, Texas, located in the Permian Basin. If these acquisitions are not completed, the proceeds will be used for exploration and development activities and general corporate purposes.

Diamondback Energy offered 3,000,000 shares of common stock at a public offering price of $62.67 per share. The underwriters exercised their option to purchase an additional 450,000 shares, bringing the total number of shares sold to 3,450,000. The total gross proceeds from the offering were approximately $211 million.

The Underwriting Agreement was entered into on February 20, 2014. The offering was priced on February 20, 2014, and the closing occurred on February 26, 2014.

The filing notes that several underwriters and their affiliates have performed and may continue to perform various financial and investment banking services for Diamondback Energy. Furthermore, affiliates of some of the underwriters are lenders under Diamondback Energy's revolving credit facility, and an affiliate of Wells Fargo Securities, LLC also serves as the administrative agent for this facility and is a counterparty to certain hedging transactions. These relationships are standard in the industry and are disclosed.