Eclipse Resources transaction to raise $440M

Eclipse Resources Corp. (NYSE:ECR) has entered into an agreement to sell 62,500,000 shares of common stock for $440 million in a private placement transaction, which is expected to result in net proceeds to the company of $434 million (after deducting placement agent commissions and the company’s estimated expenses).

The shares will be sold to the investors at a purchase price of $7.04 per share, which was the average closing price of the company’s common stock for the five-day period ended (and including) Dec. 26. The purchasers include affiliates of EnCap Investments LP, entities controlled by certain members of management of the company, and other selected institutional and accredited investors.

The private placement was approved by the Audit Committee of the company’s board of directors, which committee is composed entirely of independent directors, and is expected to close on or around Jan. 28, 2015. The company intends to use the net proceeds from the private placement to fund its capital expenditure plan and for general corporate purposes.

KeyBanc Capital Markets provided advisory services to the company and acted as sole placement agent in connection with the private placement of Eclipse’s common stock. RBC Capital Markets and Vinson & Elkins LLP served as advisors to the Audit Committee in connection with the transaction.

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