01—Abstract
Summary
Summary of the 8-K filed July 30, 2024. Cited figures are marked; the original filing is the authoritative source.
Permian Resources Corporation (NYSE: PR) disclosed on July 30, 2024 two concurrent capital-raising transactions tied to its pending acquisition of oil and gas properties and related assets owned by certain affiliates of Occidental Petroleum Corporation.
The company priced an upsized $1,000.0 milliona private offering of 6.25% senior notes due 2033 through subsidiary Permian Resources Operating, LLC, up from an initial $750.0 million size, with the notes priced at par. The notes offering is expected to close on August 5, 2024, with net proceeds of approximately $987.9 million. The notes proceeds are designated for a cash tender offer for any and all of the issuer's outstanding 7.75% Senior Notes due 2026, redemption of any 2026 Notes not tendered (expected on or about February 15, 2025 at 100.000% of principal), a portion of the purchase price for the Occidental-affiliate acquisition, and repayment of a portion of revolving credit facility borrowings.
The Tender Offer is conditioned on the notes offering closing, but the notes offering is not conditioned on the Tender Offer. Separately, Permian Resources agreed to sell 26,500,000 shares of Class A Common Stock at $15.30b per share in an underwritten public offering, with expected proceeds of approximately $401.9 million after underwriting discounts and commissions.
The equity offering is expected to close on July 30, 2024, and proceeds will fund part of the Acquisition, which is expected to close in the third quarter of 2024. Neither the offerings nor the Acquisition are conditioned on one another.
02—Key points
Key Highlights
- Priced an upsized $1,000.0 million 6.25% senior notes offering due 2033, increased from an initial $750.0 million, issued at par
- Equity offering of 26,500,000 Class A shares at $15.30 per share, with expected net proceeds of approximately $401.9 million
- Notes offering expected to generate net proceeds of approximately $987.9 million, excluding accrued interest
- Notes proceeds to fund a tender offer for the 7.75% Senior Notes due 2026, redeem remaining 2026 Notes, fund part of the Occidental-affiliate acquisition, and repay credit facility amounts
- Acquisition of oil and gas properties from certain Occidental Petroleum Corporation affiliates expected to close in the third quarter of 2024; financing is not contingent on it
- Notes expected to close August 5, 2024, and equity offering expected to close July 30, 2024
03—Questions
Frequently Asked Questions
What are the terms of the new senior notes?
Permian Resources Operating, LLC priced $1,000.0 million aggregate principal amount of 6.25% senior notes due February 1, 2033, at par. Interest is payable August 1 and February 1 each year, with the first payment on February 1, 2025. The notes are guaranteed on a senior unsecured basis by Permian Resources and the issuer's subsidiaries that guarantee its revolving credit facility.
Why is the company refinancing the 2026 Notes?
The company is using notes proceeds to purchase for cash any and all outstanding 7.75% Senior Notes due 2026 through a tender offer. Any 2026 Notes not tendered are to be redeemed on or about February 15, 2025 at 100.000% of principal plus accrued and unpaid interest.
How will the equity offering proceeds be used?
Permian Resources expects net proceeds of approximately $401.9 million from the equity offering, which it intends to use, along with a portion of the notes proceeds, to fund part of the purchase price for the Occidental-affiliate acquisition. If the acquisition is not completed, or if proceeds remain after closing, the proceeds would be used for general corporate purposes, including potential future acquisitions.
Are the offerings dependent on each other or on the acquisition?
The notes offering is not conditioned on the completion of the tender offer, and the tender offer is conditioned on the notes offering closing. The equity offering is not conditioned on the notes offering, and the notes offering is not conditioned on the equity offering. The acquisition is not contingent on either offering, and neither offering is conditioned on the acquisition.
04—Continue