Stephens Inc. Serves as Senior Co-Manager
Carrizo Oil & Gas (ticker: CRZO) has priced its public offering of common stock it issued in conjunction with its recent Delaware Basin acquisition.
As part of its efforts to pay for the $648 million purchase of 16,488 net acres from ExL Petroleum Management, Carrizo is making several different offerings to raise funds.
Immediately after announcing the acquisition, Carrizo announced it would offer 15,600,000 shares of its common stock to the public. The company states that this stock will be sold at $14.60 per share. For reference, in the last month Carrizo’s stock has traded between $22.52 and $15.61. Stephens Inc. will serve as senior co-manager on the offering.
In the press release announcing the acquisition, Carrizo announced the issuance of $250 million on newly-created redeemable preferred stock. The preferred stock will go to funds managed by GSO Capital Partners. The preferred stock will pay quarterly dividends at 8.875% per year. Carrizo has the option to pay some of the dividends in common stock, if it wishes to do so. After the third anniversary of closing, the company may redeem the stock for cash at 104.4375% of liquidation value, a rate that declines to liquidation value over the next two years. GSO will have warrants to purchase 2,750,000 shares of common stock at an exercise price of $16.08 per share; the warrants are exercisable only on a cashless “net exercise” basis and have a term of 10 years.
Finally, Carrizo has also priced the $250 million in bonds it will offer. The company’s senior notes due 2025 will pay interest at 8.25% per year. Carrizo may choose to redeem all or part of the notes at 100% of the principal amount plus a make-whole premium before July 15, 2020.
