8-KAcquisitions & DispositionsOther EventsExhibits & Filings

Diamondback Energy, Inc. 8-K Report, Acquisition Completed (Sep 12, 2014)

Filed September 12, 2014For Securities:FANG

Summary

Diamondback Energy, Inc. (FANG) announced the successful closing of its "West Texas Acquisition" on September 9, 2014, for an adjusted purchase price of $523.6 million. This strategic acquisition, involving approximately 17,617 gross acres in key Permian Basin counties (Midland, Glasscock, Reagan, and Upton), significantly expands FANG's operational footprint. The acquired properties contribute approximately 2,333 BOE/d (65% oil) in net production and an estimated 5,073 MBOE of net proved reserves as of June 1, 2014. The financing for this acquisition was primarily funded through the net proceeds from a common stock offering completed on July 25, 2014, and borrowings under the company's revolving credit facility. Diamondback Energy now operates about 88% of the newly acquired acreage, positioning the company for enhanced operational control and synergy realization in the prolific Permian Basin. Detailed financial statements and pro forma information related to this acquisition are filed as exhibits to this report.

Key Highlights

  • 1Closed acquisition of West Texas properties for an adjusted price of $523.6 million on September 9, 2014.
  • 2Acquisition includes approximately 17,617 gross (12,967 net) acres in Midland, Glasscock, Reagan, and Upton Counties, Texas (Permian Basin).
  • 3Acquired properties add approximately 2,333 BOE/d (65% oil) of net production.
  • 4Estimated net proved reserves of 5,073 MBOE as of June 1, 2014, associated with the acquired assets.
  • 5Acquisition financed through proceeds from a July 25, 2014, stock offering and revolving credit facility borrowings.
  • 6Diamondback Energy now operates approximately 88% of the acquired acreage.
  • 7Filing includes statements of revenues, direct operating expenses, and pro forma financial information for the acquired assets.

Frequently Asked Questions

The primary purpose of this 8-K filing was to report the completion of Diamondback Energy's acquisition of additional leasehold interests in the Permian Basin, referred to as the "West Texas Acquisition Properties."

The acquisition was financed using a combination of the net proceeds from Diamondback Energy's common stock offering that closed on July 25, 2014, and borrowings under its revolving credit facility.

Item 8.01 clarifies that following Viper's IPO on June 23, 2014, Viper and its related entities were designated as unrestricted subsidiaries under the indenture governing Diamondback's Senior Notes. This resulted in Viper Energy Partners LLC being released as a guarantor of those notes, meaning only remaining restricted subsidiaries now guarantee the Senior Notes. Supplemental financial information regarding these guarantors is being filed.

The filing includes the statements of revenues and direct operating expenses for the West Texas Acquisition Properties and unaudited pro forma condensed consolidated financial statements reflecting the acquisition. Detailed financial statements and reserve information are also filed as exhibits.