Each one in plain English, with the numbers worked through for a shareholder.
7 Dec 2016asset acquisition disposition● NeutralMajor
PDC completed the Kimmeridge Delaware Basin acquisition on December 6, 2016, buying about 57,000 net acres in Reeves and Culberson Counties, Texas, which resolves the pending deal from August. The Arris purchase was paid with $503,591,349 in cash and 5,390,478 shares; the 299 purchase with $412,621,614 in cash and 3,996,290 shares (cash amounts subject to post-closing adjustments). The shares were issued to the sellers under Investment Agreements with registration rights, so existing shareholders now share the company with these new holders. Financial statements and pro forma figures for the acquired businesses are to be filed later.
15 Sept 2016security holder rights change● NeutralMajor
PDC closed a $400M offering of 6.125% senior notes due 2024 on September 15, 2016, with proceeds meant to pay part of the cash price of the Kimmeridge acquisition, fees and general corporate purposes. Because the stock and convertible offerings raised over $600M, the JPMorgan bridge loan commitment was terminated. The notes must be redeemed at par plus accrued interest if the acquisition is terminated or not completed by December 31, 2016 (or in some cases January 15, 2017). The indenture also limits PDC's ability to pay dividends on its common stock.
To fund the Delaware Basin acquisition, PDC sold 7,900,000 new shares at $61.51 each to the underwriters (the shares were bought at that price from PDC), with the 1,185,000-share extra-allotment option exercised in full on September 9, for 9,085,000 shares in total. It also issued $175M of 1.125% convertible senior notes due 2021, plus a fully exercised $25M extra option, for $200M in total. The notes convert at about $85.39 per share. The new shares dilute existing holders, and the notes add debt that could add shares later.
PDC amended its revolving credit agreement on September 6, 2016 to allow the Delaware Basin acquisition and related financing. Once the acquisition closes, commitments rise from $450M to $700M and the interest rate is adjusted, which carries out the commitment letter step from the August deal. The filing also supplies Arris's financial statements and pro forma figures, and notes that two Colorado ballot proposals that would have restricted drilling failed to qualify for the November 2016 ballot, though an appeal is possible within 30 days and PDC says future proposals are possible. It also lists hedges with a fair value of $64.7M as of September 1, 2016.
24 Aug 2016capital raising announcement● NeutralMajor
PDC agreed on August 23, 2016 to buy about 57,000 net acres in Reeves and Culberson Counties, Texas (the Delaware Basin) from Kimmeridge-managed sellers for about $1.5 billion in cash and PDC stock. The deal is two parts: Arris Petroleum ($525.3M cash plus 5,390,478 shares) and the 299 Resources assets ($389.4M cash plus 3,996,290 shares). Together that is about 9.39 million new shares, so existing holders would be diluted. Closing needs customary conditions and antitrust clearance, and either side can walk away if it isn't done by December 31, 2016. PDC also lined up a JPMorgan commitment for a bridge loan of up to $600M (not expected to be drawn) and a $250M increase in its revolving credit commitments to $700M. This moves PDC beyond its Colorado and Ohio operations into Texas.
PDC ended its shareholder rights plan (the 2007 Rights Agreement with Computershare) on June 1, 2016, more than a year before its September 2017 expiry. The filing says this was for governance reasons and not in contemplation of any business combination.
18 May 2016capital raising announcement● NeutralMajor
PDC's $115 million 3.25% convertible notes matured and were settled on May 16, 2016: $114.8 million of notes were converted, paid with $114.8 million in cash plus 792,406 new shares issued to the holders. This retires the 2010 convertible debt and adds a modest number of shares.
PDC sold 5,922,500 new shares of common stock (including 772,500 over-allotment shares) to underwriters led by Merrill Lynch and J.P. Morgan at $50.11 per share, completed March 11, 2016. This is a second share offering after the March 2015 one and further dilutes existing holders; the filing does not state the use of proceeds.
PDC extended its revolving credit facility with JPMorgan Chase as agent by two years, to May 21, 2020, and the press release says the $700 million borrowing base was reaffirmed, with the commitment level kept at $450 million. This keeps the company's bank borrowing capacity in place for longer.
PDC changed its legal home from Nevada to Delaware on June 5, 2015, after stockholders approved the plan on June 4. It is the same company, with the same debts, officers and directors, and each share converted one-for-one into a share of the Delaware company; some shareholder rights changed under Delaware law.
PDC sold 4,002,000 new shares of common stock to underwriters Goldman Sachs and J.P. Morgan at $50.73 per share (including 522,000 over-allotment shares), completed March 23, 2015. This adds shares to the count, which dilutes existing holders; the filing does not state what the money will be used for.
PDC agreed to sell, together with its 50% joint venture partner LR-Mountaineer Holdings, all of PDC Mountaineer, LLC to PDC Mountaineer Holdings, LLC for $500 million in total, about $80 million of it as a promissory note from the buyer. Target owns oil and gas leasehold, mineral and midstream assets in West Virginia and Pennsylvania; PDC expects net pre-tax proceeds of about $190 million ($150 million cash and a $40 million note), with closing still subject to conditions.
