Summary
Diamondback Energy, Inc. (FANG) filed an 8-K on May 13, 2015, to announce the closing of a public offering of its common stock. The company successfully sold 4,000,000 shares at $72.53 per share, generating approximately $333.4 million in net proceeds after accounting for underwriting discounts and expenses. An additional 600,000 shares were purchased by the underwriter under an option, which was exercised in full. The primary purpose of this offering was to fund a significant portion of Diamondback Energy's previously announced pending acquisitions of approximately 15,940 gross acres (11,948 net acres) in the Midland Basin, specifically in northwest Howard County, for an aggregate purchase price of approximately $437.8 million. Any remaining proceeds not used for acquisitions will be applied to repay outstanding borrowings under the company's revolving credit facility, fund exploration and development activities, or for general corporate purposes.
Key Highlights
- 1Diamondback Energy closed a public offering of 4 million shares of common stock at $72.53 per share, raising approximately $333.4 million in net proceeds.
- 2An underwriter option for an additional 600,000 shares was exercised in full, indicating strong demand.
- 3Proceeds are primarily earmarked to fund a substantial portion of pending Midland Basin acreage acquisitions for $437.8 million.
- 4The acquisition targets approximately 15,940 gross (11,948 net) acres in northwest Howard County, Permian Basin.
- 5The offering was conducted under an effective automatic shelf registration statement on Form S-3.
- 6Pending acquisition funding, proceeds will be used to temporarily repay debt under the company's revolving credit facility.
- 7The underwriting agreement includes customary representations, warranties, indemnification provisions, and termination clauses.