ENERGEN CORP

ENERGEN CORP terminated the registration of a class of securities, ending its reporting obligation for them.

listing compliance notice

The Diamondback merger closed on November 29, 2018: each Energen share was converted into 0.6442 of a Diamondback share plus cash for any fraction (excluding treasury shares, shares owned by Diamondback or Merger Sub, and shares with valid dissenters' rights). Energen is now a wholly owned Diamondback subsidiary, its NYSE listing (EGN) is being withdrawn, and it intends to file to end its SEC reporting. All directors and listed officers left, Travis D. Stice became sole director, and all borrowings under the Wells Fargo credit agreement were repaid and the facility terminated. This resolves the merger thread opened in August 2018; Energen shareholders now hold Diamondback shares in place of Energen shares.

business combination

ENERGEN CORP's exchange filed to remove a class of its securities from listing.

listing compliance notice

Energen filed its final joint proxy statement with Diamondback, setting special shareholder meetings for both companies on November 27, 2018 (record date October 19, 2018) to vote on the merger. Energen's board unanimously recommends voting for the merger and for a non-binding vote on executive merger-related pay. The stated consideration is still 0.6442 Diamondback shares per Energen share, worth about $84.95 at the August 13 price and about $7.6 billion in total at the October 23 price. The filing says the value will fluctuate with Diamondback's share price. This moves the merger announced in August toward a vote, which is not yet held.

business combination

Energen filed the merger agreement with Diamondback and Sidewinder Merger Sub: each Energen share converts into 0.6442 Diamondback share, plus cash for fractions. Closing needs Energen and Diamondback shareholder approvals, HSR antitrust clearance, an effective S-4 registration statement, Nasdaq listing of the new shares and a tax-reorganization opinion. Either side can terminate if the deal has not closed by March 31, 2019 (extendable to June 30, 2019 for regulatory clearances). Termination fees are $400 million payable by Diamondback and $250 million payable by Energen in specified cases. Energen also amended four named executives' severance agreements to reimburse certain Section 4999 taxes in return for a wider non-compete, and added a forum-selection bylaw. This details the deal announced the day before; the equity outcome is still pending.

business combination

Energen and Diamondback Energy announced a merger agreement under which Diamondback will acquire Energen in an all-stock deal valued at about $9.2 billion including Energen's $830 million of net debt at June 30, 2018. Each Energen share would convert into 0.6442 Diamondback shares, an implied $84.95 per share based on Diamondback's August 13, 2018 close; both boards approved it unanimously. This is a new thread that, if completed, would end Energen's standalone existence, but it still needs shareholder and regulatory approvals.

business combination

Energen signed an eighth amendment to its credit agreement, extending maturity from August 30, 2019 to April 30, 2023. It raises the borrowing base from $1.7 billion to $2.15 billion and the aggregate commitment from $1.05 billion to $1.25 billion, adds a process for setting an alternate interest rate, and extends the senior notes issuance deadline to the roughly October 1, 2018 redetermination. This continues the series of amendments to the September 2014 facility.

debt financing

This amendment reports that the further Delaware Basin sale flagged in the July filing closed August 9, 2016, with buyer 299 Resources, LLC added. The total series of sales now stands at $552 million, with pre-tax proceeds of about $539 million after about $13 million of adjustments, before about $5 million of costs. Proceeds were used to fund ongoing operations, and the price remains subject to further post-closing adjustments. Minor portions went to other parties exercising preferential purchase rights.

asset acquisition disposition

Between June 3 and July 15, 2016, Energen sold non-core Delaware Basin (Texas) and San Juan Basin (New Mexico) assets for an aggregate $372 million, to buyers including Centennial Resource Production, EXL Petroleum Management, Felix Energy Holdings II and Logos Resources II. Pre-tax proceeds were about $361 million after about $10.7 million of adjustments, before about $3 million of costs, and were used to fund ongoing operations. A further Delaware Basin sale was signed and expected to close in the third quarter of 2016. Pro forma statements are attached.

asset acquisition disposition

Effective April 13, 2016, Energen signed a fourth amendment to its credit agreement, cutting the borrowing base and commitments from $1.4 billion to $1.05 billion after the April 1, 2016 redetermination. The deadline to issue certain senior notes without a borrowing base cut moved to the October 1, 2016 redetermination, and the cap on letters of credit fell from $100 million to $50 million. This continues the cuts from $2.1 billion (April 2015) and $1.6 billion to $1.4 billion (October 2015); the filing gives no reason.

material agreement

Energen sold 15,800,000 new shares to Credit Suisse at $20.99 each, and the underwriter exercised in full its option for 2,370,000 more on February 17, 2016. The offering closed February 22, 2016 with net proceeds of about $381.1 million, to repay credit facility borrowings, fund drilling and development, and/or for general corporate purposes. This follows the prospectus supplements filed Feb 17 and 19. It originally planned 12,000,000 shares and upsized to 15,800,000. For shareholders, this is a large issuance of new shares (inference: it dilutes existing holders' percentage ownership).

material agreement

Energen sold 5,700,000 new shares of common stock through Credit Suisse at $70 per share to the underwriter, closing June 22, 2015, for net proceeds of about $399.0 million. It plans to fund a slight increase in second-half 2015 drilling and a multi-year acceleration starting in 2016 with capital investment of $1 billion or more (subject to market conditions), and to repay credit facility borrowings in the meantime. The underwriter also has a 30-day option on up to 855,000 more shares. For existing shareholders this means more shares outstanding, which dilutes their percentage ownership.

material agreement

On March 31, 2015, Energen completed the sale of most of its San Juan Basin natural gas assets (New Mexico and Colorado) to Southland Royalty Company for $395 million. After about $11 million of adjustments it received roughly $384 million before about $2.8 million of costs, and used the proceeds to reduce long-term debt. The price can still be adjusted after closing. This follows the earlier Alabama Gas sale in moving Energen further toward Permian Basin focus (inference); the filing itself does not state a strategic reason.

asset acquisition disposition

Energen reported completing the Alabama Gas sale to Laclede on September 2, 2014 for $1.6 billion less about $267 million of assumed debt (the April estimate was about $320 million), giving net pre-tax proceeds of about $1.317 billion. The price is still subject to working capital adjustments. Pro forma statements attached show proceeds used to repay $570 million of term loans and $669 million of revolver borrowings, with about $244 million to be drawn on the new facility to pay taxes from the sale.

asset acquisition disposition

Energen closed the sale of Alabama Gas to Laclede (effective August 31, 2014) and, as a result, paid off its December 2013 term loan and its October 2012 revolving facility in full. It replaced them with a new secured $1.5 billion revolving credit facility (Wells Fargo as agent, $2.1 billion initial borrowing base, maturing August 30, 2019) secured by mortgages on its oil and gas properties. This completes the utility sale announced in April 2014 and moves its debt from unsecured to secured.

debt financing

Energen agreed on April 5, 2014 to sell its gas utility Alabama Gas to The Laclede Group for $1.6 billion, which includes about $320 million of debt Laclede would assume. The press release states it would leave Energen as a pure exploration and production company, with cash proceeds planned to pay down short-term debt and possibly speed up Permian Basin drilling in 2015 and beyond. Closing needs Alabama Public Service Commission approval and antitrust waiting period expiry, and was expected in 2014.

material agreement