Energen Corp. (NYSE: EGN) has priced an underwritten public offering of 5,700,000 shares of its common stock. Total gross proceeds of the offering (before underwriter's discounts and commissions and estimated offering expenses) will be $405 million. The offering is expected to close on or about June 22.
The underwriter intends to offer the shares from time to time for sale in one or more transactions on the New York Stock Exchange, in the over-the-counter market, through negotiated transactions or otherwise at market prices prevailing at the time of sale, at prices related to prevailing market prices or at negotiated prices. The underwriter has a 30-day option to purchase up to 855,000 additional shares of common stock from Energen.
Energen intends to use the net proceeds from the offering to fund a slight increase in drilling activity in the Midland Basin in the second half of 2015 and to begin a multi-year acceleration of development activities in the Permian Basin in 2016, with capital investment in 2016 of $1 billion or more. Net proceeds also may be used for other general corporate purposes, including the acquisition of proved and unproved leasehold. Pending such uses, Energen intends to use the net proceeds from this offering to repay borrowings outstanding under its credit facility.
Credit Suisse Securities (USA) LLC is acting as sole book-running manager for the offering.