Mach Natural Resources LP Announces Exercise of Over-Allotment Option

Rhea-AI Summary

Mach Natural Resources LP (NYSE:MNR) announced that underwriters have fully exercised their over-allotment option to purchase an additional 1,935,483 common units at $15.50 per unit, following their previously announced public offering of 12,903,226 common units. The option closed on February 12, 2025.

The company plans to use the net proceeds to repay approximately $23.0 million of borrowings outstanding under its super priority credit facility, with the remainder allocated to partially repay its term loan credit facility. Mach expects to repay the remaining borrowings and terminate its term loan credit facility using cash on hand and proceeds from a new credit facility.

The offering is led by joint book-running managers Stifel, Raymond James, TCBI Securities, and Truist Securities, with Johnson Rice & Company and Stephens Inc. serving as co-managers.

Positive

• Additional capital raised through full exercise of over-allotment option
• Strategic debt reduction through repayment of $23.0 million super priority credit facility
• Plan to refinance existing term loan with new credit facility

Negative

• Increased unit count leading to potential dilution for existing unitholders

Insights

Financial Analyst

The full exercise of the over-allotment option by underwriters represents a significant vote of confidence in Mach Natural Resources LP, generating additional gross proceeds of approximately $30 million (1,935,483 units at $15.50 per unit). Combined with the initial offering of 12,903,226 units, the total capital raise amounts to approximately $230 million.

The strategic debt reduction plan reveals a methodical approach to balance sheet optimization. By prioritizing the elimination of the $23 million super priority credit facility and targeting the term loan facility for complete repayment, MNR is effectively restructuring its debt hierarchy. This refinancing strategy should result in reduced interest expenses and improved financial flexibility.

The participation of six prominent financial institutions as underwriters - including Stifel, Raymond James, Texas Capital Securities, and Truist Securities - signals robust institutional confidence in MNR's business model and growth prospects. The successful placement suggests strong institutional demand, particularly noteworthy given the current market dynamics in the energy sector.

The company's decision to transition to a new credit facility post-debt repayment indicates a broader strategic shift in their capital structure. This move, combined with the equity raise, positions MNR to potentially pursue growth opportunities while maintaining a more conservative leverage profile.

OKLAHOMA CITY--(BUSINESS WIRE)-- Mach Natural Resources LP (NYSE:MNR) (“Mach”) announced today that the underwriters of its previously announced public offering (the “Offering”) of 12,903,226 common units representing limited partner interests in Mach (the “common units”) have fully exercised their option to purchase an additional 1,935,483 common units at a price to the public of $15.50 per common unit, less underwriting discounts and commissions (the “Option”). The Option closed on February 12, 2025.

Mach intends to use the net proceeds to repay in full the approximately $23.0 million of borrowings outstanding under its super priority credit facility, and the remainder to repay a portion of its term loan credit facility. Mach expects to repay the remainder of borrowings under and terminate its term loan credit facility with cash on hand and proceeds from the credit facility it intends to enter into following the date hereof.

Stifel, Nicolaus & Company, Incorporated, Raymond James & Associates, Inc., TCBI Securities, Inc., doing business as Texas Capital Securities, and Truist Securities, Inc. are acting as joint book-running managers for the Offering. Johnson Rice & Company L.L.C. and Stephens Inc. are serving as co-managers for the Offering. The offering of these securities is being made only by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended. A copy of the final prospectus may be obtained from any of the following sources:

Stifel, Nicolaus & Company, Incorporated Attention: Syndicate Department	Raymond James & Associates, Inc. Attention: Syndicate	TCBI Securities, Inc., doing business as Texas Capital Securities Attention: Prospectus Department	Truist Securities, Inc Attention: Equity Capital Markets
1 South Street, 15th Floor	880 Carillon Parkway	2000 McKinney Avenue, 7th Floor	3333 Peachtree Road NE, 9th Floor
Baltimore, MD 21202	St. Petersburg, Florida 33716	Dallas, Texas 75201	Atlanta, GA 30326
Telephone: (855) 300-7136	Telephone: (800) 248-8863	Telephone: (866) 355-6329	Telephone: (800) 685-4786
Email: syndprospectus@stifel.com	Email: prospectus@raymondjames.com	Email: prospectus@texascapital.com	Email: truistsecurities.prospectus@truist.com

Important Information

A registration statement on Form S-3 relating to these securities has been filed with the Securities and Exchange Commission (the “SEC”) and has become effective. The Offering may be made only by means of a prospectus supplement and accompanying prospectus. Copies of the final prospectus supplement and accompanying prospectus related to the Offering can be obtained by visiting the SEC’s website at www.sec.gov under “Mach Natural Resources LP.” This press release does not constitute an offer to sell or the solicitation of an offer to buy securities, and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale would be unlawful.

About Mach Natural Resources LP

Mach Natural Resources LP is an independent upstream oil and gas company focused on the acquisition, development and production of oil, natural gas and NGL reserves in the Anadarko Basin region of Western Oklahoma, Southern Kansas and the panhandle of Texas.

Cautionary Statement Concerning Forward-Looking Statements

This release contains statements that express Mach’s opinions, expectations, beliefs, plans, objectives, assumptions or projections regarding future events or future results, in contrast with statements that reflect historical facts. All statements, other than statements of historical fact included in this release regarding our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management are forward-looking statements, including, but not limited to, statements regarding the anticipated entry into our new credit facility, including timing, ability to close the new credit facility, anticipated terms of the new credit facility, anticipated uses of the funds from the new credit facility and the anticipated use of the net proceeds from the Offering, including the Option. When used in this release, words such as “may,” “assume,” “forecast,” “could,” “should,” “will,” “plan,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “project,” “budget” and similar expressions are used to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These forward-looking statements are based on management’s current belief, based on currently available information as to the outcome and timing of future events at the time such statement was made. Such statements are subject to a number of assumptions, risk and uncertainties, many of which are beyond the control of Mach, including prevailing market conditions and other factors. Please read Mach’s filings with the SEC, including “Risk Factors” in Mach’s Annual Report on Form 10-K, which is on file with the SEC, for a discussion of risks and uncertainties that could cause actual results to differ from those in such forward-looking statements.

As a result, these forward-looking statements are not a guarantee of our performance, and you should not place undue reliance on such statements. Any forward-looking statement speaks only as of the date on which such statement is made, and Mach undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250212838796/en/

Mach Natural Resources LP

Investor Relations Contact: ir@machnr.com

Source: Mach Natural Resources LP

FAQ

How many additional common units did MNR sell through the over-allotment option?

MNR sold an additional 1,935,483 common units through the over-allotment option at $15.50 per unit.

What is the total size of MNR's offering including the over-allotment option?

The total offering size is 14,838,709 common units, combining the initial 12,903,226 units and the 1,935,483 additional units from the over-allotment option.

How will MNR use the proceeds from the over-allotment option?

MNR will use the proceeds to repay $23.0 million of its super priority credit facility and partially repay its term loan credit facility.

When did MNR's over-allotment option close?

The over-allotment option closed on February 12, 2025.

What is MNR's plan for its existing term loan credit facility?

MNR plans to repay the remainder of borrowings and terminate its term loan credit facility using cash on hand and proceeds from a new credit facility.