WPX prices public stock offerings

WPX Energy (NYSE: WPX) has priced its concurrent public offerings of 30,000,000 shares of its common stock at a public offering price of $10.10 per share and 7,000,000 shares of 6.25% Series A mandatory convertible preferred stock with a purchase price and liquidation preference of $50 per share.

In addition, WPX Energy has granted the underwriters options to purchase from WPX Energy up to an additional 4,500,000 shares of common stock and up to an additional 1,050,000 shares of mandatory convertible preferred stock, in each case at the public offering price per share, less the applicable underwriting discount.

The offerings were upsized from the previously announced offerings of 27,000,000 shares of WPX Energy's common stock and $300 million aggregate liquidation preference of Series A mandatory convertible preferred stock. The offerings are expected to close July 22.

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, the concurrent senior notes offering or upon WPX’s acquisition of RKI Exploration & Production LLC, although the mandatory convertible preferred stock is subject to an optional redemption.

Unless converted earlier, each share of mandatory convertible preferred stock will convert automatically on the mandatory conversion date, which is expected to be July 31, 2018, into between 4.1254 and 4.9504 shares of WPX common stock, subject to customary anti-dilution adjustments. The number of shares of common stock issuable upon mandatory conversion will be determined based on the average volume weighted average price (VWAP) per share of WPX common stock over the 20 consecutive trading day period commencing on and including the 23rd scheduled trading day immediately preceding the mandatory conversion date.

Dividends on the shares of mandatory convertible preferred stock will be payable on a cumulative basis when, as, and if declared by WPX’s board of directors, at an annual rate of 6.25% on the liquidation preference of $50 per share. The dividends may be paid in cash or, subject to certain limitations, in shares of WPX’s common stock or any combination of cash and shares of common stock on Jan. 31, April 30, July 31, and Oct. 31 of each year, commencing on Oct. 31, 2015, and ending on, and including, July 31, 2018.

The net proceeds from the common stock offering will be approximately $292.4 million (or $336.3 million if the underwriters exercise their option to purchase additional shares of common stock in full) after deducting underwriting discounts and commissions and before estimated offering expenses payable by WPX Energy.

The net proceeds from the mandatory convertible preferred stock offering will be approximately $339.5 million (or $390.4 million if the underwriters exercise their option to purchase additional shares of mandatory convertible preferred stock in full) after deducting underwriting discounts and commissions and before estimated offering expenses payable by WPX Energy.

WPX Energy intends to use the net proceeds from the offerings, together with the proceeds from the concurrent offering of its senior unsecured notes, 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 Energy may use the net proceeds from the common stock offering and the mandatory convertible preferred stock offering (to the extent WPX Energy 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.

Barclays Capital Inc., Tudor, Pickering, Holt & Co. Securities Inc., Citigroup Global Markets Inc., JP Morgan Securities LLC, BofA Merrill Lynch, and Wells Fargo Securities LLC are acting as joint book-running managers for the common stock offering.

Barclays Capital Inc., Citigroup Global Markets Inc., JP Morgan Securities LLC, BofA Merrill Lynch, Wells Fargo Securities LLC, and BNP Paribas Securities Corp. are acting as joint book-running managers for the mandatory convertible preferred stock offering.

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