Permian Resources Corporation Announces Secondary Public Offering of Class A Common Stock

Rhea-AI Summary

Permian Resources Corporation (NYSE: PR) announces a public offering of 48,500,000 shares of its Class A Common Stock, with certain affiliates and management as selling stockholders. The Company will not receive proceeds from the offering but plans to purchase 2,000,000 common units from the selling stockholders. The underwriter is Goldman Sachs & Co. LLC, and the offering is subject to market conditions.

Insights

Financial Analyst

The commencement of an underwritten public offering of 48,500,000 shares by Permian Resources represents a significant liquidity event for the selling stakeholders, primarily composed of private equity firms and company management. The decision by these entities to divest a portion of their holdings can be interpreted in several ways. On one hand, it could signal their confidence in the company's current valuation, suggesting a belief that the market may have reached an optimal price point. On the other hand, it may also indicate a desire to reallocate capital towards other investments or to diversify their portfolios.

For current and prospective investors, the offering could lead to dilution of ownership percentages, although it's important to note that Permian Resources itself is not issuing new shares or receiving proceeds from this transaction. The concurrent purchase and cancellation of OpCo Units and Class C Common Stock, respectively, is a strategic move that may aim to consolidate the company's ownership structure and could potentially enhance shareholder value in the long term.

Market response to such offerings is typically contingent on the perceived stability and growth potential of the company, as well as broader market conditions. Given that the offering is not conditioned upon the completion of the Concurrent OpCo Unit Purchase, there is an element of uncertainty which may affect market sentiment. However, the involvement of a reputable underwriter like Goldman Sachs & Co. LLC could lend credibility to the offering and possibly stabilize investor confidence.

Market Research Analyst

The public offering by Permian Resources is poised to impact the energy sector, particularly within the oil and gas market where the company operates. The Permian Basin, from which the company derives its name, is a prolific oil-producing region. As such, movements by major players within this region are closely watched for indications of sector health and investor sentiment towards energy commodities.

Investors will be keen to assess the demand for the offering, which can serve as a barometer for the energy sector's attractiveness. High demand could indicate a bullish outlook for oil and gas, potentially leading to increased investment across the sector. Conversely, a lackluster response might signal caution or a bearish sentiment. Furthermore, the pricing of the OpCo Units relative to the Class A common stock will be an important metric for investors to evaluate the intrinsic valuation of the company's equity structure.

The transaction details, particularly the price per share and OpCo Unit, will be critical in assessing the immediate financial implications for the company and its investors. Any significant deviation from industry norms in pricing or the structure of the transaction could influence market perception and investor behavior.

Legal Expert

The offering's compliance with the Securities Act of 1933 is paramount, as it ensures the legitimacy of the transaction and protects investor interests. The requirement for a prospectus and prospectus supplement provides transparency, detailing the terms of the offering and the risks involved. This level of disclosure is essential for maintaining market integrity and investor trust.

It's also noteworthy that the press release explicitly states the offering will not constitute an offer to sell or a solicitation of an offer to buy in any jurisdiction where such actions would be unlawful. This highlights the regulatory complexities involved in such transactions, which must navigate not only federal securities laws but also the varying regulations of individual states and jurisdictions.

Investors should be aware that the legal framework surrounding public offerings is designed to prevent market manipulation and ensure fair access to investment opportunities. The involvement of high-caliber legal teams and underwriters in preparing and conducting the offering is indicative of the transaction's significance and complexity.

MIDLAND, Texas--(BUSINESS WIRE)-- Permian Resources Corporation (“Permian Resources” or the “Company”) (NYSE: PR) today announced the commencement of an underwritten public offering of an aggregate 48,500,000 shares of its Class A Common Stock, par value $0.0001 per share (“Class A common stock”), 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 the Company’s management (the “Selling Stockholders”).

Permian Resources will not sell any shares of Class A common stock in the offering and will not receive any proceeds therefrom.

Concurrently with the closing of the offering, the Company intends to purchase (the “Concurrent OpCo Unit Purchase”) from certain of the Selling Stockholders an aggregate 2,000,000 common units representing limited liability company interests (“OpCo Units”) in Permian Resources Operating, LLC, a Delaware limited liability company and a subsidiary of Permian Resources (“OpCo”), at a price per OpCo Unit equal to the price per share at which the underwriter purchases shares of Class A common stock in the offering and to cancel a corresponding number of shares of the Company’s Class C Common Stock, par value $0.0001 per share, held by such Selling Stockholders. The offering of Class A common stock is not conditioned upon the completion of the Concurrent OpCo Unit Purchase, but the Concurrent OpCo Unit Purchase is conditioned upon the completion of the offering.

Goldman Sachs & Co. LLC is serving as the underwriter for the offering. The offering is subject to market and other conditions, and there can be no assurance as to whether or when the offering may be completed, or as to the actual size or terms of the offering.

The proposed offering is being made pursuant to a registration statement previously filed by the Company with the U.S. Securities and Exchange Commission (the “SEC”) that became automatically effective upon filing on November 8, 2023.

The proposed offering will be made only by means of a prospectus and prospectus supplement that meet the requirements under the Securities Act of 1933, as amended (the “Securities Act”). Copies of the preliminary prospectus supplement and accompanying base prospectus and final prospectus supplement, when available, may be obtained from: Goldman Sachs & Co. LLC, Prospectus Department, 200 West Street, New York, NY 10282, by telephone at (866) 471-2526, by facsimile at (212) 902-9316 or by emailing Prospectus-ny@ny.email.gs.com; or by accessing the SEC’s website at www.sec.gov.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy shares of Class A common stock or any other securities, nor shall there be any sale of securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful without registration or qualification under the securities laws of any such state or jurisdiction.

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.

Cautionary Note Regarding 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, regarding the completion of the offering and the Concurrent OpCo Unit Purchase, the Company’s strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives and expectations of management regarding the Company or managements’ equity holdings or compensation arrangements 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. Be cautioned that these forward-looking statements are subject to all of the risk and uncertainties, most of which are difficult to predict and many of which are beyond Permian Resources’ control, incident to the development, production, gathering and sale of oil and natural gas. These risks include, but are not limited to, commodity price volatility, inflation, lack of availability of drilling and production equipment and services and risks relating to the Company’s ability to realize the anticipated benefits and synergies of its merger with Earthstone Energy, Inc. Actual results or the referenced outcomes could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including, but not limited to, those set forth in the Company’s filings with the SEC, including the prospectus relating to the offering, the registration statement described above and its Annual Report on Form 10-K for the fiscal year ended December 31, 2023, under the caption “Risk Factors,” as may be updated from time to time in the Company’s periodic filings with the SEC. Any forward-looking statement in this press release speaks only as of the date of this release. The Company undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by any applicable securities laws.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240304482479/en/

Hays Mabry – Sr. Director, Investor Relations

Mae Herrington – Engineering Advisor, Investor Relations

(832) 240-3265

ir@permianres.com

Source: Permian Resources Corporation

FAQ

How many shares of Class A Common Stock are being offered by Permian Resources (PR)?

Permian Resources is offering 48,500,000 shares of its Class A Common Stock.

Who are the selling stockholders involved in the public offering by Permian Resources (PR)?

Certain affiliates of EnCap Investments L.P., NGP Energy Capital Management L.L.C., Pearl Energy Investments, Riverstone Investment Group LLC, and certain members of the Company's management are the selling stockholders.

Which company is serving as the underwriter for the offering by Permian Resources (PR)?

Goldman Sachs & Co. LLC is serving as the underwriter for the offering.

How can interested parties obtain the preliminary prospectus supplement for the offering by Permian Resources (PR)?

Interested parties can obtain the preliminary prospectus supplement and accompanying base prospectus from Goldman Sachs & Co. LLC or by accessing the SEC's website.

Is the proposed offering of Class A common stock by Permian Resources (PR) subject to any conditions?

The proposed offering of Class A common stock is subject to market and other conditions, and there is no assurance on the completion, size, or terms of the offering.