WPX Energy (NYSE: WPX) has begun concurrent public offerings of $1.2 billion aggregate principal amount of senior unsecured notes, 27,000,000 shares of its common stock, and $300 million aggregate liquidation preference of its Series A mandatory convertible preferred stock.
These offerings are separate public offerings made by means of separate prospectus supplements under WPX’s effective shelf registration statement and are not contingent on each other or upon the consummation of WPX’s acquisition of RKI Exploration & Production LLC, although the notes are subject to a special mandatory redemption and the mandatory convertible preferred stock is subject to an optional redemption.
Pursuant to the offerings for the common stock and mandatory convertible preferred stock, WPX intends to grant the underwriters options to purchase from WPX up to an additional 4,050,000 shares of common stock and up to an additional $45 million aggregate liquidation preference of mandatory convertible preferred stock.
WPX intends to use proceeds from the offerings, cash on hand, and borrowings under its revolving credit facility to finance the acquisition of RKI and to pay related fees and expenses. If for any reason the RKI acquisition is not consummated, then WPX may use the net proceeds from the common stock offering and the mandatory convertible preferred stock offering (to the extent WPX does not exercise its option to redeem the mandatory convertible preferred stock pursuant to its terms) for working capital needs or general corporate purposes, including the repayment of indebtedness and other acquisitions. The notes will be subject to a special mandatory redemption if the RKI acquisition is not consummated.
Barclays Capital Inc. is acting as book-running manager for the senior unsecured notes offering and the mandatory convertible preferred stock offering, and Barclays Capital Inc. and Tudor, Pickering, Holt & Co. Securities Inc. are acting as joint book-running managers for the common stock offering.