Summary
Diamondback Energy, Inc. (FANG) announced significant financing activities through an 8-K filing on December 19, 2016, detailing a common stock offering and a senior notes issuance. These transactions, which closed on December 20, 2016, raised substantial capital to fund the acquisition of oil and natural gas assets from Brigham Resources Operating, LLC and Brigham Resources Midstream, LLC. The company successfully issued approximately $1.15 billion in common stock, including the full exercise of underwriters' options, and $500 million in senior notes. These strategic moves underscore Diamondback Energy's aggressive growth strategy and its commitment to expanding its asset base. The capital raised is primarily earmarked for the Brigham acquisition, indicating a significant operational expansion for the company. Additionally, the filing highlights an amendment to the company's credit agreement, increasing its permitted unsecured senior notes issuance capacity from $750 million to $1.0 billion, providing further financial flexibility.
Key Highlights
- 1Diamondback Energy completed a common stock offering of 10,500,000 shares at $95.3025 per share, generating proceeds of approximately $1.15 billion (net of expenses and discounts).
- 2Underwriters fully exercised their option to purchase an additional 1,575,000 shares, bringing the total common stock offering to 12,075,000 shares.
- 3The company also issued $500 million in 5.375% Senior Notes due 2025 through a private placement.
- 4Proceeds from both the stock and note offerings are intended to fund the cash consideration for the pending acquisition of oil and natural gas assets from Brigham Resources.
- 5A fourth amendment to Diamondback's credit agreement was executed, increasing its permitted unsecured senior notes issuance ceiling from $750 million to $1.0 billion.
- 6The common stock offering was made under an effective automatic shelf registration statement on Form S-3.
- 7The transactions closed on December 20, 2016.