Each one in plain English, with the numbers worked through for a shareholder.
17 Oct 2019security holder rights change● NeutralMajor
The $500 million of 5.375% senior unsecured notes due November 1, 2027 closed on October 16, 2019, as expected in the October 10 pricing. The proceeds were lent to the operating company to repay revolver borrowings. The notes are guaranteed by the operating company (not by Diamondback or the general partner), rank behind the secured revolver, and the indenture limits things like new debt, distributions and asset sales. Interest is paid each May 1 and November 1, starting May 1, 2020.
On October 10, 2019 the company priced an upsized $500 million of 5.375% senior unsecured notes due 2027 at par (net about $492 million, closing expected October 16), with proceeds to repay revolver borrowings. A third credit agreement amendment on October 8 lifted the limit on unsecured notes from $400 million to $1 billion and allowed up to $500 million of notes before the November 2019 borrowing base review without a borrowing base cut. This continues the October 7 notes proposal, upsized by $100 million, and replaces part of the bank debt with fixed-rate notes.
7 Oct 2019asset acquisition disposition● NeutralMajor
On October 1, 2019 the company completed the Drop-Down Acquisition from Diamondback subsidiaries (about 5,490 net royalty acres) for about 18.3 million new Class B units, about 18.3 million new operating company units and $190.2 million in cash, valued at $740.2 million; the borrowing base rose by $125 million to $725 million. It also disclosed about $193.6 million of third-party mineral purchases in Q3 2019, the Santa Elena deal still pending, and a proposed $400 million senior notes offering to repay revolver borrowings. The new Class B units dilute existing holders and increase Diamondback's stake.
On September 24, 2019 the revolving credit agreement was amended a second time so the borrowing base automatically rises by $125 million once the pending acquisition of mineral and royalty interests from Diamondback subsidiaries (the 'Drop-Down Acquisition') closes, which was expected in Q4 2019. This ties the credit line to that parent-company deal, which had not been described in earlier filings seen here.
On September 9, 2019 the company agreed to buy about 1,358 net royalty acres in Glasscock and Martin counties (Midland Basin) from Santa Elena Minerals, LP, an unrelated seller, for $150 million paid entirely in new common units, about 5.2 million at $29.02 per unit. Closing is expected in Q4 2019 with an October 1 effective date; the seller waives Q4 2019 distributions on those units and is locked up for 180 days, so this issues new units (dilution for existing holders) rather than using cash or debt. Production from the assets was about 1,400 BOE/d in Q2 2019.
On June 27, 2019 the company's operating subsidiary and Wells Fargo (with the lenders) amended the revolving credit agreement, raising the borrowing base (the cap on what it can borrow) from $555 million to $600 million. This was the scheduled May 2019 review of the facility; it adds borrowing room but the filing does not say how much is drawn.
On February 26, 2019 the company agreed to sell 9,500,000 units at $32.00 (plus a 1,425,000-unit option, exercised in full February 28); the sale closed March 1 with net proceeds of about $340.4 million. Proceeds go to buy operating company units, which will repay part of the revolver and fund general purposes, possibly including acquisitions. This is another unit sale for debt repayment, at a price slightly above August 2018's $31.25 (comparison from earlier filings).
On July 31, 2018 the company agreed to sell 9,000,000 units at $31.25 (plus a 1,080,000-unit option, exercised in full August 1); the sale closed August 3 with net proceeds of about $305.3 million. The proceeds go to buy operating company units, which will repay part of the revolver and fund general purposes, possibly including acquisitions. The price is roughly double the $14.75 of July 2017 (comparison from earlier filings), and the units are sold under a new automatic shelf registration.
On July 20, 2018 the Wells Fargo credit agreement was amended and restated so the operating company (Viper Energy Partners LLC) is the borrower and the listed partnership is a guarantor, reflecting a May 30, 2018 assignment. The filing states all other material terms stayed the same. This follows the May 2018 restructuring.
15 May 2018capital raising announcement● NeutralMajor
On May 9-10, 2018 the company completed its switch from a pass-through to a taxable entity, approved by the board on March 29, 2018. Diamondback swapped its 73,150,000 common units for 73,150,000 Class B units plus the same number of units in the operating company, which are exchangeable back into common units one-for-one. Diamondback exchanged 731,500 of these into common units on May 10 and still controls the company through the general partner. The company also signed a sixth credit agreement amendment letting the operating company pay distributions to other holders and issue nonvoting units. The filing says the steps are not expected to be taxable to the company and describes the structure as expected to give operational and tax benefits.
On November 28, 2017 the company signed a fifth amendment to its Wells Fargo credit agreement, extending maturity from July 2019 to November 1, 2022 and lowering interest margins (0.75%-1.75% over the alternate base rate, 1.75%-2.75% over LIBOR). The maximum credit amount rose to $2.0 billion and the borrowing base to $400 million from $275 million. It also raised the mortgage requirement to 85% of property value and allowed cash to be netted against debt in the leverage covenant. This reverses the higher margins set in the October 2016 amendment.
On July 17, 2017 the company agreed to sell 14,000,000 units at $14.75 (plus a 2,100,000-unit option, exercised in full on July 18); the sale closed July 21 with net proceeds of about $232.6 million. Diamondback bought 700,000 units and held about 64% of the partnership afterward, down from about 84% in 2016 (earlier context). Proceeds are to repay revolver debt, fund part of the price of 'pending acquisitions' (not named or priced in this filing) and for general purposes.
The January 2017 unit sale (the one flagged by the earlier prospectus filings) closed on January 24: 8,500,000 units at $15.50, plus the underwriters' full 1,275,000-unit option exercised on January 19, for net proceeds of about $147.6 million. The money is meant to repay revolver borrowings and for general purposes, possibly including more acquisitions. The price is below the $16.00 paid in the July 2016 offering (comparison from earlier context), and new units add to the unit count.
As of October 28, 2016 the company signed a fourth amendment to its Wells Fargo credit agreement, raising both the maximum credit amounts and the borrowing base to $275.0 million, up from the $175.0 million set in June 2016. The amendment also raised interest margins, to 1.00%-2.00% over the alternate base rate and 2.00%-3.00% over LIBOR. This gives more borrowing capacity at a higher cost.
On July 26, 2016 the company agreed to sell 7,000,000 common units at $16.00 each (plus a 1,050,000-unit option), and the firm offering closed August 1, 2016 with net proceeds of about $109.0 million. Diamondback bought 2,000,000 of the units and held about 84% of the partnership afterward. Proceeds are intended to repay part of the revolving credit facility and fund a pending acquisition of Delaware Basin mineral interests, which the filing does not price or detail. The $16.00 price is well below the $26.00 and $28.50 offering prices from 2014, a comparison drawn from earlier filings.
On June 21, 2016 the company signed a third amendment to its July 2014 credit agreement with Wells Fargo, setting the borrowing base at $175.0 million. The amendment also requires the borrower and other loan parties to provide control agreements over deposit and securities accounts to secure the loan. The filing does not state the previous borrowing base, so the size of the change cannot be determined from it.
On September 15, 2014 the company agreed to sell 3,500,000 common units at $28.50 each (plus a 525,000-unit over-allotment option), and the firm units closed September 19, 2014 with net proceeds of about $95.4 million. Unlike the June 2014 offering, where proceeds went to Diamondback, the company says it will use these proceeds to repay borrowings under its credit agreement and fund pending and future acquisitions. For shareholders, this means more units outstanding (dilution of existing holders' percentage).
14 July 2014security holder rights change● NeutralMajor
On July 8, 2014 the company entered a $500.0 million senior secured revolving credit facility with Wells Fargo as administrative agent, maturing July 8, 2019. The borrowing base was initially $110.0 million, and Wells Fargo was the only lender with a maximum credit amount of $55.0 million. The facility is secured by substantially all assets, limits distributions, and requires total debt to EBITDAX of no more than 4.0 to 1.0 and a current ratio of at least 1.0 to 1.0. This is the company's first debt facility after the June 2014 offering.
23 June 2014asset acquisition disposition● NeutralMajor
The company (filing as Viper Energy Partners LP) closed its first public offering of common units on June 23, 2014: 5,000,000 units at $26.00 each, with the 750,000-unit over-allotment option exercised in full on June 19. Net proceeds of about $137.5 million were paid as a distribution to Diamondback Energy, the Sponsor, not kept by the company. After the closing Diamondback owns 70,450,000 units, about 92% of the partnership, and controls the general partner. The filing also records a long-term incentive plan (up to 9,144,000 units), 2,000,000 unit options granted to executive officers, and a $500,000 annual advisory agreement with Wexford Capital.
