Each one in plain English, with the numbers worked through for a shareholder.
9 Apr 2015debt financing● Neutral
On April 8, 2015 Concho signed a First Amendment to its Second Amended and Restated Credit Agreement (dated May 9, 2014, JPMorgan Chase as agent), keeping the borrowing base at $3.25 billion. It caps the cash that can be netted against debt in the debt-ratio calculation at $150 million and removes the current-ratio covenant. This is a new credit agreement version replacing the 2008 agreement tracked earlier, and it is a routine redetermination with modest covenant changes.
On February 26, 2015 Concho agreed to sell 6,900,000 new shares in a public offering, expecting about $741.2 million net, closing March 4, 2015. The money is meant to repay all outstanding credit-facility borrowings and for general corporate purposes, which may include drilling and acquisitions. It adds shares for existing holders (dilution) while cutting bank debt.
On May 12, 2014 Concho agreed to an underwritten public sale of up to 7,475,000 shares of common stock, including 975,000 shares the underwriters could buy extra; they exercised that option in full on May 13. Closing was expected May 16, 2014. The filing gives no proceeds figure or stated use, only that credit-facility lender affiliates among the underwriters will receive part of the proceeds. This adds new shares for existing holders (dilution), the first stock offering in this record since the 2010 private placements.
The extra $850 million of 5.5% notes due 2023 closed on June 4, 2013, and part of the proceeds paid for the tender offer. Holders of about $225.6 million (roughly 75.2%) of the 8.625% notes due 2017 tendered and consented, so the company signed an Eighth Supplemental Indenture removing most covenants and some default events on the remaining 2017 notes and shortening the redemption notice to three business days. About $74.4 million of the $300 million, by simple subtraction, was not tendered by the consent deadline.
Concho agreed on May 20, 2013 to sell an extra $850 million of its 5.5% Senior Notes due 2023 (on top of the $700 million issued in August 2012), priced at 103.750% of face for a yield to worst of 4.884%; closing is expected June 4, 2013. The proceeds are to fund a tender offer for all of the $300 million 8.625% notes due 2017, with any not tendered intended (not required) to be redeemed. This is the first filing to state a use of proceeds for a note offering, and it swaps higher-interest debt for lower-interest debt. The filing also says some underwriter affiliates that lend under the credit facility will receive part of the proceeds.
Concho amended its credit agreement again (Eleventh Amendment, April 15, 2013): the $4.0 billion cap on unsecured notes and the borrowing-base cut for later note issues are removed. It also allows restricted payments up to $250 million plus 50% of net income and 66 2/3% of new stock proceeds from January 1, 2013, and loosens hedging limits. The $3.0 billion borrowing base and $2.5 billion commitments were kept.
Concho amended its credit agreement (Tenth Amendment, October 26, 2012): the borrowing base rises from $2.5 billion to $3.0 billion, the cap on unsecured senior notes rises from $3.1 billion to $4.0 billion, and the no-borrowing-base-cut deadline for new notes moves to November 2, 2013. It also drops the ban on signing agreements for certain disposals or swap changes, leaving only the ban on completing them.
Concho sold $700 million of 5.5% Senior Notes due April 1, 2023 in a public offering, closing August 17, 2012. They are unsecured and guaranteed by subsidiaries. The filing says some underwriters' affiliates are credit facility lenders and will receive part of the proceeds; it does not state the use of proceeds beyond that. (Inference: this may relate to the borrowings used for Three Rivers, but the filing does not say so.)
2 July 2012asset acquisition disposition▲ GoodMajor
Concho closed the Three Rivers acquisition on July 2, 2012 for about $1.0 billion in cash, funded with credit facility borrowings, resolving the thread opened in May. The properties are in the Permian Basin of West Texas and Southeast New Mexico, including positions in the northern Delaware Basin, the Midland Basin Wolfberry and the emerging southern Midland Basin Wolfcamp and Cline shale plays.
Concho amended its credit agreement (Ninth Amendment, May 31, 2012) to raise lenders' total commitments from $2.0 billion to $2.5 billion. It can now borrow up to the full $2.5 billion borrowing base, which gives it more room to draw on the facility, as it intends to do for the Three Rivers purchase.
Concho agreed on May 11, 2012 to buy all of Three Rivers Operating Company's oil and gas properties for about $1.0 billion in cash, to be funded with credit facility borrowings. Closing is expected on or before July 2, 2012, subject to due diligence, regulatory approval and other conditions, and Concho can walk away if defects and casualty losses exceed $150 million.
Concho amended its bank credit agreement (Eighth Amendment, April 12, 2012), raising the cap on unsecured senior notes from $2.5 billion to $3.1 billion and pushing the no-borrowing-base-cut deadline for new notes from November 1, 2012 to May 1, 2013. The $2.5 billion borrowing base was reaffirmed. This updates the Seventh Amendment terms from October 2011.
Concho sold $600 million of 5.5% Senior Notes due October 1, 2022 in a public offering, closing March 12, 2012; this follows the shelf registration and prospectus filings of March 7-8. The notes are unsecured and guaranteed by its subsidiaries. The filing says underwriters' affiliates that lend under the credit facility will receive part of the proceeds; it does not otherwise state how the proceeds will be used.
A Seventh Amendment to the credit agreement, dated October 12, 2011, raised the cap on senior unsecured notes from $1.9 billion to $2.5 billion and pushed the date for issuing notes without a borrowing-base reduction from May 1, 2012 to November 1, 2012. It also reaffirmed the existing $2.5 billion borrowing base. No new borrowing or note issuance is reported in this filing.
Concho completed a public offering of $600 million of 6.5% Senior Notes due January 15, 2022 on May 23, 2011, guaranteed by its subsidiaries, with interest paid each January 15 and July 15 starting January 15, 2012. Certain underwriters' affiliates are credit-facility lenders and will receive part of the net proceeds; the filing does not state a specific use. It follows the December 2010 $600 million 7.0% notes and uses room created by the April 2011 credit amendment, which raised the notes cap to $1.9 billion.
A Sixth Amendment to the credit agreement, dated April 25, 2011, extended maturity from July 31, 2013 to April 25, 2016 and raised the borrowing base from $2.0 billion to $2.5 billion. Interest spreads were lowered (Eurodollar 1.50%-2.50%, down from 2.00%-3.00%) and the cap on senior unsecured notes rose from $900 million to $1.9 billion, with no borrowing-base reduction for notes issued before May 1, 2012. The commitment size remains $2.0 billion, with the ability to grow to $2.5 billion if lenders agree. It also eases leverage-ratio and hedging rules around acquisitions.
Concho completed a public offering of $600 million of 7.0% Senior Notes due January 15, 2021 on December 14, 2010, guaranteed by its subsidiaries and issued under the 2009 indenture. Interest is paid each January 15 and July 15, starting July 15, 2011. Certain underwriters' affiliates are credit-facility lenders and will receive part of the net proceeds; the filing does not state a specific use of proceeds. This adds to the $300 million 8.625% notes due 2017 and uses the higher notes cap set by the Fifth Amendment.
On December 8, 2010 Concho agreed an underwritten public offering of 2,875,000 common shares with Goldman Sachs as representative, closing scheduled for December 14, 2010. This adds more shares after the October private placement, diluting holders further. Certain underwriters' affiliates are credit-facility lenders and will receive part of the proceeds. A Fifth Amendment to the credit agreement raised the cap on senior unsecured notes from $800 million to $900 million and waived the usual borrowing-base reduction for senior notes issued from December 7, 2010 until the next redetermination.
13 Oct 2010asset acquisition disposition● NeutralMajor
Concho closed the Marbob Energy acquisition on October 7, 2010 for aggregate consideration of about $1.3 billion (down from the ~$1.65 billion announced in July; the filing does not explain the difference), plus about $32 million for extra non-operated interests. Payment was about $1.1 billion cash, 1,103,752 shares at $45.30 to one seller, and a $150 million 8% unsecured note due October 7, 2018. The $300 million private placement of 6,622,517 shares at $45.30 closed alongside it, so existing holders are diluted, and Concho agreed to file a resale registration within 90 days. The credit facility's borrowing base and commitments rose from $1.2 billion to $2.0 billion, about $900 million was newly borrowed to close, and the cap on senior unsecured notes rose from $600 million to $800 million. The acquired Permian Basin acreage in Southeast New Mexico sits next to Concho's Yeso play and includes a position in the Bone Spring play. Executives also received restricted stock vesting October 7, 2014 (Leach 109,250 shares; four other senior officers 21,850 each). Financial statements for the acquired assets are promised by December 27, 2010.
20 July 2010capital raising announcement● NeutralMajor
Concho agreed to buy substantially all the oil and gas assets of Marbob Energy and affiliates (Pitch, Costaplenty, John R. Gray LLC) for about $1.65 billion: $1.45 billion cash, a $150 million 8% unsecured note due eight years after closing, and 1,103,752 shares at $45.30 to Pitch. It plans to fund the cash with a $300 million private placement of 6,622,517 shares at $45.30 plus its credit facility (an amendment is still to be arranged, backed by lender commitments). Closing is expected by November 30, 2010; Concho can terminate if title and environmental defects exceed $51.5 million, paying a $20 million fee. This is far larger than the $225 million Terrace deal in 2009, and the new shares will dilute existing holders.
Concho and its lenders signed a third credit agreement amendment that narrows the ban on negative pledges to exclude assets outside the borrowing base calculation. The lenders waived defaults tied to certain oil and gas leases containing negative pledges and released their liens on those properties. The filing gives no figures.
Concho amended its credit agreement again, raising the borrowing base from $955.9 million to $1.2 billion and lender commitments from $960 million to $1.2 billion. It also lets lenders reduce the base by less than $0.30 per dollar of senior notes issued, lifts the cap on senior unsecured notes from $300 million to $600 million, and raises the hedging limit to 100% of estimated production for the next two years. This builds on the earlier 2009 amendments and the $300 million notes.
Concho agreed with Merrill Lynch, J.P. Morgan and UBS to sell up to 5,347,500 new common shares in a public offering, including 697,500 over-allotment shares that the underwriters exercised in full on January 27, 2010. Closing was scheduled for February 1, 2010. The filing gives no price or proceeds figure, and does not state what the proceeds will be used for beyond noting that some underwriter affiliates that are credit facility lenders will receive part of them. The new shares dilute existing holders.
Concho, through its subsidiary COG Operating LLC, agreed to buy interests in producing and non-producing Wolfberry trend assets in the Permian Basin from Terrace Petroleum Corporation and others for up to $225 million, with closing expected around December 18, 2009. Its final ownership will be between about 20% and 100% depending on whether third parties exercise participation rights, and the price can be reduced for title or environmental defects found in due diligence.
Concho completed the $300 million 8.625% Senior Notes due 2017 offering announced days earlier, maturing October 1, 2017, with interest paid each April 1 and October 1. About $287 million of net proceeds goes to repaying credit facility borrowings. Lenders holding about 95.4% of the borrowing base waived most of the automatic reduction, so the base fell only about $4.1 million (instead of $90 million) to $955.9 million.
Concho agreed with underwriters led by J.P. Morgan Securities to sell $300 million of 8.625% Senior Notes due 2017, guaranteed by its subsidiaries. It expects about $287.0 million in net proceeds, to be used to repay part of its credit facility borrowings; closing was scheduled for September 18, 2009.
Concho amended its bank credit agreement with JPMorgan Chase and its lenders, keeping the borrowing base at $960 million but making borrowing costlier: the Eurodollar margin range rises from 1.25%-2.75% to 2.00%-3.00%, the alternate base rate margin range from 0.00%-1.25% to 1.125%-2.125%, and the unused commitment fee to a flat 0.50%. It also adds defaulting-lender provisions.
