Centennial readies itself for a busy 2017 in the Permian

Centennial Resource Development, Inc. and its affiliates (ticker: CDEV) has entered into agreements to issue and sell $910 million of equity securities to third-party investors in a private placement, including its previously announced agreement to issue and sell to an affiliate of Riverstone Holdings LLC (“Riverstone”) up to $500 million of equity securities.

Centennial expects to use a portion of the net proceeds from the offering to fully fund its pending acquisition of the upstream assets of Silverback Exploration, LLC and the remaining portion of the net proceeds for general corporate purposes.

Third-party investors other than Riverstone will purchase $480 million of CDEV Class A common stock at $14.54 per share.  Riverstone and affiliated funds will purchase $430 million in a combination of CDEV Class A common stock and convertible preferred shares at the common equivalent of $14.54 per share.

The preferred shares will automatically convert into shares of Class A common stock upon the approval of the Company’s stockholders of such conversion at a special meeting of stockholders to be held for such purpose.  Holders of the preferred shares will not be entitled to a preferred dividend, but will be entitled to participate in dividends payable on the common stock. The preferred shares will also have a liquidation preference of $0.0001 per share and holders will be entitled to participate with common stockholders in distributions upon liquidation.

The closing of the equity issuance is expected to occur on or before December 30, 2016 and is subject to certain closing conditions, including the closing of the Silverback acquisition and other customary closing conditions.

Centennial Resource Development Equity Private Placements Now Total $910 Million

Source: Centennial Resource Development

Centennial is focused on the Delaware basin where the company will become one of the largest operators upon closing the acquisition of Silverback Exploration’s Delaware basin assets. When that transaction is final, CDEV will control over 77,000 contiguous net acres in the Delaware.

The Permian continues to be the main focus of attention for U.S. operators, with seven additional rigs added to the area last week, per BHI counts, bringing the total to 235, 18 more than this time last year, and nearly six-times as many rigs as the next most-active U.S. play – the Eagle Ford.


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