What is the primary purpose of the $1.1 billion note offering?

The primary purpose of the $1.1 billion note offering is to fund the full redemption of Rattler Midstream LP's outstanding 5.625% Senior Notes due 2025. Additionally, a portion of the proceeds will be used for general corporate purposes, which may include funding part of the cash consideration for the pending acquisition of certain oil and natural gas assets from FireBird Energy LLC.

When is the expected closing date for the new note offering and the redemption of the Rattler Notes?

The closing of the sale of the new notes is expected to occur on October 28, 2022. The redemption of the Rattler Notes is scheduled for November 1, 2022, but this is conditional upon the successful closing of the new debt offering and receipt of sufficient proceeds.

What are the terms and ranking of the new 6.250% Senior Notes due 2033?

The new notes are 6.250% Senior Notes due 2033, with an aggregate principal amount of $1.1 billion. They will be the Company's general unsecured senior obligations, ranking equally with existing and future senior indebtedness, including the Company's outstanding senior notes and its guarantee under the revolving credit facility. They will also rank senior to any future subordinated indebtedness. Importantly, the obligations under these new notes will be fully and unconditionally guaranteed on a senior unsecured basis by Diamondback E&P LLC.

What is the redemption price for the Rattler Midstream LP Senior Notes?

The redemption price for the Rattler Midstream LP Senior Notes due 2025 will be 102.813% of the principal amount outstanding on the redemption date, plus any accrued and unpaid interest up to, but not including, the redemption date.

FANG 8-K: Material Agreements

Summary

Diamondback Energy, Inc. (FANG) announced on October 17, 2022, its entry into an Underwriting Agreement for the issuance and sale of $1.1 billion in aggregate principal amount of 6.250% Senior Notes due 2033. The offering is priced at 99.572% of the principal amount, with an expected closing date of October 28, 2022. These notes will be general unsecured senior obligations of the Company and are fully guaranteed on a senior unsecured basis by Diamondback E&P LLC. The net proceeds are earmarked for funding the full redemption of Rattler Midstream LP's outstanding 5.625% Senior Notes due 2025 and for general corporate purposes, including potential use in the acquisition of oil and natural gas assets from FireBird Energy LLC. In conjunction with this debt offering, Diamondback also issued a notice of conditional redemption for all outstanding Rattler Midstream LP Senior Notes due 2025, with a redemption date of November 1, 2022. The redemption is contingent on the successful consummation of the debt offering and receipt of sufficient proceeds. This strategic move signals a proactive approach to capital management and potential growth through acquisitions, aiming to optimize the company's debt structure and fund strategic initiatives.

Key Highlights

1Diamondback Energy priced a $1.1 billion offering of 6.250% Senior Notes due 2033.
2The net proceeds are intended for the redemption of all outstanding Rattler Midstream LP 5.625% Senior Notes due 2025.
3A portion of the proceeds will also be used for general corporate purposes, including the potential acquisition of assets from FireBird Energy LLC.
4The new notes are unsecured senior obligations of Diamondback Energy and are guaranteed by Diamondback E&P LLC.
5The company announced a conditional redemption of all Rattler Midstream LP Senior Notes due 2025, scheduled for November 1, 2022, subject to the debt offering closing.
6The redemption price for the Rattler Notes will be 102.813% of the principal amount plus accrued interest.
7The offering and redemption strategy suggests active management of the company's debt profile and potential expansion.

Diamondback Energy, Inc. 8-K Report, Material Agreement (Oct 20, 2022)

Summary

Key Highlights

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