01—Abstract
Summary
Summary of the 8-K filed March 4, 2024. Cited figures are marked; the original filing is the authoritative source.
On March 4, 2024, Permian Resources Corporation announced the commencement of an underwritten public offering of 48,500,000 shares of its Class A Common Stock by certain selling stockholders, including affiliates of EnCap Investments L.P., NGP Energy Capital Management L.L.C., Pearl Energy Investments, Riverstone Investment Group LLC, and certain members of management.
The Company will not sell any shares and will not receive any proceeds from the offering. Goldman Sachs & Co. LLC is the underwriter. Concurrently with the closing of the offering, the Company intends to purchase 2,000,000 OpCo Units in Permian Resources Operating, LLC from certain selling stockholders at a price equal to the per-share offering price, and to cancel a corresponding number of Class C common shares.
The offering is not conditioned on this purchase, but the purchase is conditioned on completion of the offering. The offering is subject to market conditions and there is no assurance it will be completed or as to its final size or terms. Co-Chief Executive Officers James Walter and Will Hickey are each offering up to four million Class A shares, which the filing states represent less than 20%a of their aggregate ownership.
Each will retain beneficial ownership of greater than 2% of combined Class A and Class C shares, and each has advised the Company that he expects to retain a minimum of 12 million shares. After the offering, management will collectively own approximately 6.7% of outstanding common stock, which the filing values at over $800 millionb based on the stock price as of March 1, 2024.
02—Key points
Key Highlights
- Underwritten secondary offering of 48,500,000 Class A common shares by certain affiliates of EnCap, NGP, Pearl Energy and Riverstone, plus certain management members
- Permian Resources will receive no proceeds from the offering, as all shares are sold by selling stockholders
- Concurrent purchase of 2,000,000 OpCo Units from selling stockholders, with a corresponding cancellation of Class C common stock
- Co-CEOs James Walter and Will Hickey each offering up to four million shares, representing less than 20% of their aggregate ownership
- Walter and Hickey each expect to retain a minimum of 12 million shares and continue to receive all compensation in equity
- Management will collectively own approximately 6.7% of outstanding common stock after the offering, valued at over $800 million
- Goldman Sachs & Co. LLC is serving as underwriter, and the offering is made under a registration statement effective upon filing on November 8, 2023
03—Questions
Frequently Asked Questions
Will Permian Resources receive any cash from this offering?
No. The filing states the Company will not sell any shares of Class A common stock in the offering and will not receive any proceeds from it. The shares are being sold by the selling stockholders.
How many shares are being sold in the offering?
An aggregate of 48,500,000 shares of Class A Common Stock are being offered by certain affiliates of EnCap Investments L.P., NGP Energy Capital Management L.L.C., Pearl Energy Investments and Riverstone Investment Group LLC, and certain members of management.
Are the Co-CEOs selling a large portion of their holdings?
According to the filing, each Co-CEO is offering up to four million shares, which represent less than 20% of their aggregate ownership assuming vesting of existing performance-based equity grants. Each will still hold more than 2% of the combined Class A and Class C common stock and expects to retain at least 12 million shares.
What is the separate concurrent transaction tied to the offering?
The Company intends to purchase 2,000,000 OpCo Units in Permian Resources Operating, LLC from certain selling stockholders at a price per unit equal to the per-share offering price, and cancel a corresponding number of Class C common shares. This purchase is conditioned on completion of the offering, but the offering is not conditioned on it.
What risks are associated with the offering?
The filing states the offering is subject to market and other conditions, and there can be no assurance as to whether or when it will be completed or as to its actual size or terms. The filing's forward-looking statements also cite risks including commodity price volatility, inflation, and the ability to realize anticipated benefits and synergies of the merger with Earthstone Energy, Inc.
04—Continue