Permian Resources Corporation Announces Tender Offer for Its 7.75% Senior Notes Due 2026

Rhea-AI Summary

Permian Resources (NYSE: PR) has announced a cash tender offer for its 7.75% Senior Notes due 2026. The offer, made through its subsidiary Permian Resources Operating, , aims to purchase any and all of the outstanding $300 million in notes. The purchase price will be determined based on a fixed spread plus the yield of a specified U.S. Treasury security. Key points:

- Tender offer expires on August 2, 2024, at 5:00 p.m. New York City time
- Expected settlement date is August 8, 2024
- Offer is conditional on completing a contemporaneous debt financing
- Company intends to redeem any unpurchased notes on February 15, 2025

Permian Resources is the second-largest Permian Basin pure-play E&P company, focused on high-return oil and natural gas properties in the Delaware Basin.

Positive

• Potential reduction of outstanding debt through the tender offer
• Refinancing opportunity through the contemporaneous debt financing
• Company's position as the second-largest Permian Basin pure-play E&P

Negative

• Potential increase in interest expenses if new debt financing has higher rates
• Risk of not completing the debt financing, which could affect the tender offer

Insights

Financial Analyst

Permian Resources 's tender offer for its 7.75% Senior Notes due 2026 is a significant financial move that warrants attention. This action, coupled with the planned debt refinancing, suggests a strategic effort to optimize the company's capital structure.

Key points to consider:

• The tender offer targets $300 million in outstanding notes, indicating a substantial refinancing effort.
• The purchase price will be determined based on U.S. Treasury yields plus a fixed spread, potentially resulting in cost savings depending on current market conditions.
• The company plans to use proceeds from a new debt financing to fund the tender offer, suggesting a swap of higher-cost debt for potentially lower-cost debt.
• Any notes not tendered are expected to be redeemed on February 15, 2025, at 100% of principal, showing a clear strategy to eliminate this debt entirely.

This move could potentially lower Permian Resources' interest expenses and extend its debt maturity profile, both of which would be positive for the company's financial health. However, the success of this strategy hinges on the terms of the new debt financing, which have not been disclosed.

Investors should watch for details on the new debt issuance and the level of participation in the tender offer to fully assess the impact on Permian Resources' balance sheet and future cash flows.

Oil & Gas Industry Expert

Permian Resources' debt refinancing initiative reflects broader trends in the oil and gas sector, particularly among Permian Basin operators. This move is indicative of the industry's focus on financial optimization in a volatile commodity price environment.

Several factors make this development noteworthy:

• As the second-largest pure-play E&P in the Permian Basin, Permian Resources' financial strategies can influence sector trends.
• The company's proactive approach to debt management suggests confidence in its operational outlook and ability to secure favorable financing terms.
• The timing of this refinancing, amidst fluctuating oil prices, underscores the importance of maintaining financial flexibility in the cyclical energy sector.

This refinancing effort, if successful, could strengthen Permian Resources' position in the competitive Permian Basin landscape. It may enable the company to allocate more capital to high-return development projects, potentially boosting production and reserves.

However, investors should consider the broader market context. If other Permian operators follow suit with similar refinancing efforts, it could signal a sector-wide push for financial resilience, potentially impacting capital allocation strategies across the industry.

MIDLAND, Texas--(BUSINESS WIRE)-- Permian Resources Corporation (“Permian Resources,” “we,” “us” or “our”) (NYSE: PR) today announced that Permian Resources Operating, LLC (“Permian Resources OpCo”), a subsidiary of Permian Resources, commenced a cash tender offer (the “Tender Offer”) to purchase any and all of the outstanding senior notes (the “Notes”) listed in the following table upon the terms and conditions described in Permian Resources OpCo’s Offer to Purchase, dated July 29, 2024 (the “Offer to Purchase”).

Certain information regarding the Notes and the U.S. Treasury Reference Security, the Bloomberg reference page and the fixed spread is set forth in the table below.

Title of Security		CUSIP Numbers		Principal Amount Outstanding		U.S. Treasury Reference Security		Bloomberg Reference Page		Fixed Spread (basis points)
7.75% Senior Notes due 2026(1)		19416MAA7 (144A) / U19447AA6 (Reg S)		$300,000,000		2.000% U.S. Treasury due February 15, 2025		FIT3		0
(1) The Notes are callable at a redemption price of 100.00% of the principal amount thereof, plus accrued and unpaid interest, starting on February 15, 2025.

The “Purchase Price” for each $1,000 principal amount of the Notes validly tendered, and not validly withdrawn, and accepted for purchase pursuant to the Tender Offer will be determined in the manner described in the Offer to Purchase by reference to the fixed spread specified above plus the yield based on the bid-side price of the U.S. Treasury Reference Security specified above, as quoted on the Bloomberg Bond Trader FIT3 series of pages, at 2:00 p.m. New York City time, on August 2, 2024, the date on which the Tender Offer is currently scheduled to expire. The Purchase Price will be based on a yield to February 15, 2025, the date of the next specified redemption price reduction under the indenture governing the Notes, and assuming the Notes are redeemed on February 15, 2025, at the specified redemption price for such date of 100.000% of the principal amount, as described in the Offer to Purchase.

In addition to the Purchase Price, holders whose Notes are purchased pursuant to the Tender Offer will also receive accrued and unpaid interest thereon from the last interest payment date up to, but not including, the initial date on which Permian Resources OpCo makes payment for such Notes, which date is currently expected to be August 8, 2024, assuming that the Tender Offer is not extended or earlier terminated.

The Tender Offer is being made pursuant to the terms and conditions contained in the Offer to Purchase and Notice of Guaranteed Delivery, copies of which may be obtained from D.F. King & Co., Inc., the tender agent and information agent for the Tender Offer, by calling (800) 676-7437 (toll-free) or, for banks and brokers, (212) 269-5550. Copies of the Offer to Purchase and Notice of Guaranteed Delivery are also available at the following web address: https://www.dfking.com/permian; or by requesting via email at permian@dfking.com.

The Tender Offer will expire at 5:00 p.m., New York City time, on August 2, 2024 unless extended or earlier terminated (such time and date, as the same may be extended, the “Expiration Time”). Tendered Notes may be withdrawn at any time before the Expiration Time. Holders of Notes must validly tender and not validly withdraw their Notes (or comply with the procedures for guaranteed delivery) before the Expiration Time to be eligible to receive the consideration for their Notes.

Settlement for all Notes tendered prior to the Expiration Time or pursuant to a Notice of Guaranteed Delivery is expected to be August 8, 2024, assuming that the Tender Offer is not extended or earlier terminated.

There can be no assurance that any Notes will be purchased. The Tender Offer is conditioned upon the satisfaction of certain conditions, including the completion of a contemporaneous debt financing (the “Debt Financing”) by Permian Resources OpCo on terms and conditions (including, but not limited to, the amount of proceeds raised in such financing) satisfactory to Permian Resources OpCo and Permian Resources. The Tender Offer is not conditioned upon any minimum amount of Notes being tendered. The Tender Offer may be amended, extended, terminated or withdrawn. Permian Resources OpCo intends to use a portion of the net proceeds of the Debt Financing to fund the purchase of the Notes in the Tender Offer.

Subject to completion of the Tender Offer, we intend to redeem all Notes not purchased in the Tender Offer on or about February 15, 2025 (the “Redemption”) at a redemption price of 100.000% of the principal amount, plus accrued and unpaid interest, if any, to the redemption date.

Permian Resources OpCo has retained J.P. Morgan Securities LLC to serve as the exclusive Dealer Manager for the Tender Offer. Questions regarding the terms of the Tender Offer may be directed to J.P. Morgan Securities LLC, Liability Management Group, at (866) 834-4666 (toll-free) or (212) 834-4818 (collect).

This press release is neither an offer to purchase nor a solicitation of an offer to sell any Notes in the Tender Offer and does not constitute a notice of redemption for the 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.

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 of 1933, as amended, 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 the Debt Financing 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, 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/20240728642996/en/

Hays Mabry – Vice President, Investor Relations

(432) 315-0114

ir@permianres.com

Source: Permian Resources Corporation

FAQ

What is the expiration date for Permian Resources' (PR) tender offer for its 7.75% Senior Notes due 2026?

The tender offer for Permian Resources' (PR) 7.75% Senior Notes due 2026 is set to expire on August 2, 2024, at 5:00 p.m. New York City time, unless extended or earlier terminated.

How much of the 7.75% Senior Notes due 2026 is Permian Resources (PR) offering to purchase?

Permian Resources (PR) is offering to purchase any and all of the outstanding $300 million in 7.75% Senior Notes due 2026.

What is the expected settlement date for Permian Resources' (PR) tender offer?

The expected settlement date for Permian Resources' (PR) tender offer is August 8, 2024, assuming the offer is not extended or earlier terminated.

What condition is Permian Resources' (PR) tender offer subject to?

Permian Resources' (PR) tender offer is conditional upon the completion of a contemporaneous debt financing on terms satisfactory to the company.