Mach Natural Resources LP Announces Pricing of Public Offering of Common Units

Rhea-AI Summary

Mach Natural Resources LP (MNR) has announced the pricing of its public offering of 12,903,226 common units at $15.50 per unit. The company has also granted underwriters an option to purchase up to an additional 1,935,483 common units.

Mach expects to receive net proceeds of approximately $192.5 million after deducting underwriting costs and expenses. The proceeds will be used to repay $23.0 million of borrowings under its super priority credit facility, with the remainder allocated to partially repay its term loan credit facility.

The offering is expected to close on February 7, 2025. Joint book-running managers include Stifel, Raymond James, TCBI Securities, and Truist Securities, with Johnson Rice & Company and Stephens Inc. serving as co-managers.

Positive

• Substantial capital raise of $192.5 million through public offering
• Debt reduction through full repayment of super priority credit facility
• Trading on major exchange (NYSE) under MNR symbol

Negative

• Significant dilution for existing shareholders through issuance of 12.9 million new units
• All proceeds directed to debt repayment rather than growth initiatives

Insights

Financial Analyst

This public offering represents a strategic financial restructuring that warrants careful analysis. The pricing at $15.50 per unit, approximately 9.8% below current market price, suggests a deliberate balance between attractiveness to new investors and minimal dilution impact on existing unitholders.

The debt restructuring strategy is particularly noteworthy. By using the $192.5M proceeds to eliminate the super priority credit facility ($23M) and substantially reduce the term loan facility, Mach is effectively streamlining its debt structure. This could potentially result in reduced interest expenses and improved financial flexibility.

The involvement of multiple prestigious underwriters - Stifel, Raymond James, TCBI Securities and Truist Securities - adds credibility to the offering. Their participation suggests confidence in Mach's business model and future prospects.

The timing of this offering, amid current market conditions, appears strategic. With energy sector volatility and interest rate uncertainties, securing this financing now could provide Mach with enhanced operational flexibility and a stronger balance sheet position for future opportunities.

For investors, this offering presents both opportunities and considerations. While there's potential dilution for existing unitholders, the debt reduction and simplified capital structure could lead to improved financial health and potentially lower cost of capital in the long term.

OKLAHOMA CITY--(BUSINESS WIRE)-- Mach Natural Resources LP (“Mach”) announced today the pricing of its public offering (the “Offering”) of 12,903,226 common units representing limited partner interests in Mach (the “common units”) at a price to the public of $15.50 per common unit. Mach has granted the underwriters an option to purchase up to an additional 1,935,483 common units at the public offering price, less underwriting discounts and commissions. Mach expects to receive net proceeds of approximately $192.5 million, after deducting underwriting discounts and commissions and estimated offering expenses and excluding any exercise of the underwriters’ option to purchase additional common units. Mach intends to use the net proceeds from the Offering 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 consummation of the Offering. Mach’s common units trade on the New York Stock Exchange under the ticker symbol “MNR.” The Offering is expected to close on February 7, 2025, subject to customary closing conditions.

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. When available, 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 preliminary 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, and anticipated uses of the funds from the new credit facility, the expected closing date, the size of the Offering, our ability to complete the Offering and the amount of and the anticipated use of the net proceeds from the Offering. 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.

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Mach Natural Resources LP

Investor Relations Contact: ir@machnr.com

Source: Mach Natural Resources LP

FAQ

How much is Mach Natural Resources (MNR) raising in its public offering?

Mach Natural Resources is raising approximately $192.5 million in net proceeds through its public offering of 12,903,226 common units priced at $15.50 per unit.

What is the price per unit for MNR's public offering?

The public offering price is set at $15.50 per common unit.

When is MNR's public offering expected to close?

The public offering is expected to close on February 7, 2025, subject to customary closing conditions.

How will MNR use the proceeds from its public offering?

MNR will use the proceeds to repay $23.0 million of borrowings under its super priority credit facility and the remainder to repay a portion of its term loan credit facility.

How many additional units can underwriters purchase in MNR's offering?

Underwriters have the option to purchase up to an additional 1,935,483 common units at the public offering price.