Summary
Diamondback Energy, Inc. (FANG) announced on December 11, 2018, an At-the-Market (ATM) Equity Offering Sales Agreement with Merrill Lynch, Pierce, Fenner & Smith Incorporated. This agreement allows for the potential sale of up to approximately 2.02 million shares of FANG's common stock by its selling stockholders, Ajax Resources, LLC and F&A Wylie Investments, LLC. These shares were originally acquired by the selling stockholders in connection with FANG's prior acquisition of certain assets from Ajax. The offering is registered under a Form S-3 filing that became effective on November 29, 2018. This filing is significant as it outlines a mechanism for the selling stockholders to monetize a portion of their FANG holdings. Investors should note that this is a secondary offering, meaning existing shares are being sold, not new shares issued by the company, thus no new capital will be raised by Diamondback Energy itself from these sales. The agreement includes a sales commission of up to 2.0% and reimbursement for certain expenses, which will be borne by the selling stockholders.
Key Highlights
- 1Diamondback Energy's selling stockholders (Ajax Resources and F&A Wylie Investments) entered into an ATM Equity Offering Sales Agreement.
- 2The agreement permits the sale of up to approximately 2.02 million shares of FANG common stock.
- 3This is a secondary offering, meaning existing shares are being sold by stockholders, not newly issued shares by the company.
- 4The shares were acquired by the selling stockholders as part of a prior asset acquisition from Ajax by Diamondback Energy.
- 5The offering is registered with the SEC via a Form S-3 registration statement effective November 29, 2018.
- 6Selling stockholders will pay a commission of up to 2.0% to the sales agent and reimburse certain expenses.