Each one in plain English, with the numbers worked through for a shareholder.
28 Apr 2020debt financing▲ GoodMajor
On April 27, 2020 Parsley signed a Ninth Amendment to its revolving credit facility: elected commitments rise from $1.0 billion to $1.075 billion, the borrowing base is reaffirmed at $2.7 billion, and maturity extends from October 28, 2021 to October 28, 2023. Borrowing margins increase to 2.00-3.00% (LIBOR) and a maximum secured leverage ratio of 2.50x is added, with the next redetermination due around October 15, 2020. The company's press release ties the move to the COVID-19-driven downturn.
Parsley filed Jagged Peak's audited 2019 financial statements and pro forma combined 2019 accounts, as a follow-up to the Jagged Peak acquisition completed January 10, 2020. Jagged Peak reported 2019 revenue of $594.7 million and a net loss of $68.6 million, with total assets of $2.03 billion and long-term debt of $785.6 million. This supplies required financial information and does not change the deal terms.
Parsley's subsidiaries redeemed in full the $400 million 6.250% senior notes due 2024 on March 7, 2020, and the indenture was discharged on March 9. This carries out the redemption intended in February, alongside the new 4.125% 2028 notes, so that $400 million of 6.250% debt is gone and replaced by $400 million at a lower stated rate (the pairing is an inference from the February filings).
Nuveen Asset Management, LLC, TIAA-CREF Investment Management, LLC, Teachers Advisors, LLC reported a Pioneer PE Holding LLC shareholding of 13,632,221 shares (4.85% of votes) in a periodic institutional filing.
Nuveen Asset Management, LLC, TIAA-CREF Investment Management, LLC, Teachers Advisors, LLC reported a Pioneer PE Holding LLC shareholding of 13,632,221 shares (4.85% of votes) in a periodic institutional filing.
Nuveen Asset Management, LLC, TIAA-CREF Investment Management, LLC, Teachers Advisors, LLC reported a Pioneer PE Holding LLC shareholding of 13,632,221 shares (4.85% of votes) in a periodic institutional filing.
On February 11, 2020 Parsley's subsidiaries closed the $400 million offering of 4.125% senior unsecured notes due February 15, 2028, with U.S. Bank as trustee. The notes are guaranteed by the subsidiaries that guarantee the revolver, but not by Parsley Energy, Inc. This completes the financing launched on February 6; the earlier filing said proceeds-linked redemption of the 6.250% 2024 notes was intended (the filing itself does not state use of proceeds).
Ahead of a planned $400 million private offering of senior unsecured notes due 2028 (announced February 6, 2020), Parsley disclosed that after the Jagged Peak deal it holds about 258,000 net Permian acres (148,000 Midland, 110,000 Delaware). It estimates Q4 2019 oil production of 89.5-89.7 MBo/d and capital spending of $275-285 million, guides Q1 2020 oil production to 123.0-129.0 MBo/d, and says it intends to redeem its $400 million 6.250% 2024 notes at 104.688% if the offering completes. Cash was about $67.6 million and $400.0 million was drawn on the revolver at February 4, 2020, leaving $593.2 million available. The Q4 figures are preliminary and the filing warns they could change materially.
Q-Jagged Peak Energy Investment Partners, LLC, QEM V, LLC, S. Wil VanLoh, Jr disclosed a new substantial Pioneer PE Holding LLC shareholding (17.30% of votes).
10 Jan 2020asset acquisition disposition● NeutralMajor
Parsley completed the Jagged Peak acquisition on January 10, 2020: each Jagged Peak share became 0.447 Parsley Class A shares, and performance stock units converted into vested Parsley shares. Jagged Peak's credit facility was paid off and terminated, while its 5.875% senior notes due 2026 were assumed by a Parsley subsidiary. Parsley also signed an Eighth Amendment to its credit agreement (changing passive holding company covenants) and added two Jagged Peak directors (James Kleckner and Wil VanLoh), making an 11-member board. This resolves the merger thread, and existing Parsley holders are diluted as planned.
Parsley disclosed that six Jagged Peak stockholders sued Jagged Peak and its directors over the merger, claiming the proxy statement omitted material information; one also claims the sale undervalues Jagged Peak. The suits seek to block the merger and damages. Jagged Peak calls them without merit and added voluntary disclosures to the proxy statement (confidentiality terms with two other bidders, extra cash-flow projections) to avoid delay. The special meeting remains set for January 9, 2020; this is a new risk to the merger timeline.
Amendment No. 1 to the S-4 (November 22, 2019) sets both companies' special meetings for January 9, 2020. At the October 11, 2019 closing price the exchange ratio was worth about $7.59 per Jagged Peak share; the share count is fixed, so the value changes with Parsley's share price. Terms are unchanged from the October agreement, so this continues the merger process.
Parsley filed its registration statement (Form S-4) on November 4, 2019 for the Jagged Peak deal agreed October 14, 2019, registering up to 96,480,854 new Class A shares at the 0.447 exchange ratio. It also discloses that Chairman Bryan Sheffield signed a voting agreement to back the share issuance, and that Quantum's affiliate's agreement makes Jagged Peak's approval assured unless its board changes its recommendation. Meeting dates and percentage holdings are blank in this preliminary draft. This continues the merger thread.
Parsley agreed on October 14, 2019 to acquire Jagged Peak Energy in an all-stock merger: each Jagged Peak share converts into 0.447 Parsley Class A shares, leaving Parsley holders with about 77% and Jagged Peak holders about 23% of the combined company. Parsley will repay Jagged Peak's credit facility and assume its senior unsecured notes, and the board will expand to 11 with two Jagged Peak directors. Closing needs stockholder approval from both companies, HSR clearance and an effective S-4, with an outside date of May 14, 2020; termination fees are $57.4 million payable by Jagged Peak and $189.0 million payable by Parsley in specified cases. This is a new thread and means existing Parsley shareholders will be diluted to 77% if it closes.
Parsley adopted a Fourth Amended and Restated Parsley LLC agreement (July 22, 2019), updating tax-related provisions; all members consented. It also merged its financial code of ethics into a combined Code of Business Conduct and Ethics, with expanded anti-bribery, antitrust and reporting provisions. No financial terms are stated.
A Seventh Amendment to the credit agreement (April 23, 2019) raised the borrowing base from $2.3 billion to $2.7 billion, with elected commitments unchanged at $1.0 billion, and doubled the Aggregate Maximum Credit Amounts from $2.5 billion to $5.0 billion. It also lowered the title coverage requirement from 85% to 80% and loosened rules on redeeming notes, restricted payments and midstream investments. Continues the series of borrowing-base increases.
