Permian Resources Announces $750.0 Million Private Placement of Senior Notes Due 2033

Rhea-AI Summary

Permian Resources (NYSE: PR) has announced a $750.0 million private placement of senior unsecured notes due 2033. The offering is subject to market conditions and will be made to eligible purchasers under Rule 144A and Regulation S. Concurrently, the company has launched a tender offer to purchase any and all of its outstanding 7.75% Senior Notes due 2026. The net proceeds will be used to:

• Purchase outstanding 2026 Notes through the tender offer
• Fund the redemption of any remaining 2026 Notes
• Partially fund the acquisition of assets from Occidental Petroleum affiliates
• Repay a portion of outstanding credit facility debt

This offering is not registered under the Securities Act and is only available to qualified institutional buyers and non-U.S. persons.

Positive

• Raising $750.0 million through senior notes offering
• Refinancing higher-interest 2026 Notes with new 2033 Notes
• Funding acquisition of oil and gas assets from Occidental Petroleum affiliates
• Reducing credit facility debt

Negative

• Increasing long-term debt obligations
• Potential dilution of shareholder value due to new debt issuance

Financial Analyst

Permian Resources' announcement of a $750 million private placement of senior notes due 2033 is a significant financial move that warrants attention. This debt issuance serves multiple strategic purposes:

• Debt Refinancing: The company aims to replace its existing 7.75% Senior Notes due 2026 with potentially lower-cost, longer-term debt. This could improve the company's debt profile and reduce interest expenses.
• Acquisition Funding: Part of the proceeds will finance the recently announced acquisition of assets from Occidental Petroleum , indicating an expansion strategy.
• Liquidity Management: Any remaining funds will be used to repay a portion of the outstanding credit facility, potentially improving the company's liquidity position.

The move to refinance debt ahead of maturity and fund acquisitions suggests a proactive financial management approach. However, investors should consider the impact on the company's leverage ratios and long-term debt obligations. The success of this offering will depend on market conditions and investor appetite for energy sector debt.

It's worth noting that this private placement is to qualified institutional buyers and non-U.S. persons, which could indicate the company's preference for sophisticated investors or potential regulatory considerations. The concurrent tender offer for the 2026 Notes provides existing noteholders an exit opportunity, potentially at a premium.

Overall, this financial maneuver demonstrates Permian Resources' efforts to optimize its capital structure while pursuing growth opportunities in the Permian Basin. Investors should closely monitor the terms of the new notes and the success of the tender offer to gauge the market's reception of this strategy.

Oil & Gas Industry Expert

Permian Resources' $750 million senior notes offering, coupled with the acquisition of assets from Occidental Petroleum, signals a strategic move to strengthen its position in the Permian Basin. This region is known for its prolific oil and gas production and expanding operations here could significantly boost the company's reserves and production capacity.

Key points to consider:

• Acquisition Strategy: The purchase of assets from a major player like Occidental Petroleum suggests Permian Resources is targeting high-quality, proven reserves. This could enhance the company's portfolio and potentially improve its production efficiency.
• Market Timing: With oil prices relatively stable and the energy sector recovering from recent volatility, this move indicates confidence in the long-term prospects of the Permian Basin.
• Operational Synergies: Depending on the location of the acquired assets, there could be significant operational synergies, potentially leading to cost reductions and improved margins.
• Industry Consolidation: This transaction reflects the ongoing trend of consolidation in the U.S. shale industry, as companies seek to achieve economies of scale and improve their competitive position.

However, investors should be mindful of the challenges:

• Integration Risks: Successful integration of the new assets will be important for realizing the expected benefits.
• Commodity Price Exposure: The increased investment in the Permian Basin amplifies the company's exposure to oil and gas price fluctuations.
• Environmental Considerations: As ESG factors gain importance, the company's expanded operations may face increased scrutiny regarding environmental impact and sustainability practices.

This strategic move positions Permian Resources for potential growth but also increases its operational and financial commitments in a dynamic and challenging industry environment.

MIDLAND, Texas--(BUSINESS WIRE)-- Permian Resources Corporation (“Permian Resources,” “we,” “us” or “our”) (NYSE: PR) announced today that, subject to market conditions, Permian Resources Operating, LLC, a subsidiary of Permian Resources (the “Issuer”), intends to offer for sale in a private placement under Rule 144A and Regulation S under the Securities Act of 1933, as amended (the “Securities Act”), to eligible purchasers $750.0 million in aggregate principal amount of senior unsecured notes due 2033 (the “Notes”). The Notes will be guaranteed on a senior unsecured basis by Permian Resources and all of the Issuer’s subsidiaries that guarantee the Issuer’s obligations under its senior secured credit facility (the “credit facility”).

Concurrently with this offering, the Issuer commenced a tender offer (the “Tender Offer”) to purchase for cash any and all of its outstanding 7.75% Senior Notes due 2026 (the “2026 Notes”) validly tendered and not validly withdrawn. The Tender Offer is made only by and pursuant to the terms of the Offer to Purchase, dated July 29, 2024. The Tender Offer is conditioned on the consummation of this offering, but this offering is not conditioned upon the completion of the Tender Offer. Subject to completion of the Tender Offer, we intend to redeem all 2026 Notes not purchased in the Tender Offer on or about February 15, 2025 at a redemption price of 100.000% of the principal amount, plus accrued and unpaid interest, if any, to the redemption date (the “Redemption”).

The Issuer intends to use the net proceeds from this offering (i) to purchase for cash any and all of the Issuer’s outstanding 2026 Notes, pursuant to the Tender Offer, including any related premiums and expenses in connection therewith, (ii) to the extent any 2026 Notes remain outstanding after the Tender Offer, to fund the Redemption, (iii) to fund a portion of the purchase price for the recently announced acquisition of oil and gas properties, interests and related assets owned by certain affiliates of Occidental Petroleum Corporation (the “Acquisition”) and (iv) with any remaining net proceeds, to repay a portion of the amounts outstanding under the credit facility.

The Notes have not been registered under the Securities Act, or any state securities laws, and, unless so registered, the Notes may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. The Issuer plans to offer and sell the Notes only to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act and to persons outside the United States pursuant to Regulation S under the Securities Act.

This communication shall not constitute an offer to sell, or the solicitation of an offer to buy, any of the Notes, nor shall there be any sale of the Notes in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. Additionally, this communication shall not constitute an offer to purchase or the solicitation of an offer to sell any 2026 Notes in the Tender Offer, nor does it constitute a notice of redemption under the indenture governing the 2026 Notes.

About Permian Resources

Headquartered in Midland, Texas, Permian Resources is an independent oil and natural gas company focused on the responsible acquisition, optimization and development of high-return oil and natural gas properties. Permian Resources’ assets and operations are concentrated in the core of the Delaware Basin, making it the second largest Permian Basin pure-play E&P.

Forward-Looking Statements

The information in this press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact included in this press release, including statements regarding this offering and the use of proceeds therefrom, including the Tender Offer and the timing and outcome thereof and the Redemption, our strategy, plans and objectives of management, are forward-looking statements. When used in this press release, the words “could,” “may,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “project,” “goal,” “plan,” “target” and similar expressions are intended 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 expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events.

We caution you that any forward-looking statements are subject to all of the risks and uncertainties, most of which are difficult to predict and many of which are beyond our control, incident to the development, production, gathering and sale of oil and natural gas. Factors which could cause our actual results to differ materially from the results contemplated by forward-looking statements may include, but are not limited to, risks relating to the Acquisition and the timing thereof and those set forth in Permian Resources’ filings with the U.S. Securities and Exchange Commission (the “SEC”), including its Annual Report on Form 10-K for the fiscal year ended December 31, 2023, and its subsequent Quarterly Reports on Form 10-Q, under the caption “Risk Factors,” as may be updated from time to time in Permian Resources’ periodic filings with the SEC.

Should one or more of the risks or uncertainties described in this press release occur, or should any underlying assumptions prove incorrect, our actual results and plans could differ materially from those expressed in any forward-looking statements. All forward-looking statements, expressed or implied, included in this press release are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue.

Except as otherwise required by applicable law, we disclaim any duty to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this press release.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240728828466/en/

Hays Mabry – Vice President, Investor Relations

(432) 315-0114

ir@permianres.com

Source: Permian Resources Corporation

FAQ

What is the purpose of Permian Resources' $750 million senior notes offering?

Permian Resources (NYSE: PR) is offering $750 million in senior notes due 2033 to refinance existing debt, fund an acquisition from Occidental Petroleum affiliates, and reduce credit facility debt.

How will Permian Resources (PR) use the proceeds from the $750 million notes offering?

Permian Resources will use the proceeds to purchase and redeem outstanding 2026 Notes, partially fund an acquisition of assets from Occidental Petroleum affiliates, and repay a portion of its credit facility debt.

What is the tender offer associated with Permian Resources' (PR) new notes issuance?

Permian Resources has launched a tender offer to purchase any and all of its outstanding 7.75% Senior Notes due 2026, in conjunction with the new $750 million senior notes offering due 2033.

Who is eligible to participate in Permian Resources' (PR) $750 million private placement?

The private placement is available only to qualified institutional buyers under Rule 144A and non-U.S. persons under Regulation S of the Securities Act.