Clayton Williams Energy, Inc. Announces Cash Tender Offer for up to $100 Million of its 7.75% Senior Notes due 2019
Clayton Williams Energy, Inc. (NYSE: CWEI) (the “Company,” “we” or “us”)
today announced that it has commenced a modified “Dutch Auction” cash
tender offer (the “Tender Offer”) to purchase up to
$100,000,000 aggregate principal amount (the “Tender Cap”) of its 7.75%
senior notes due 2019 (the “Notes”). The Tender Offer will expire
at 11:59 p.m., New York City time, on August 29, 2016, unless extended
by the Company in its sole discretion (such time, as the same may be
extended, the “Expiration Time”). Holders of Notes who validly tender
(and do not validly withdraw) their Notes prior to 5:00 p.m., New York
City time, on August 10, 2016, unless extended by the Company in its
sole discretion (such time, as the same may be extended, the “Early
Tender Time”), will be eligible to receive the Total Consideration (as
defined below) for their Notes.
The following table summarizes the material pricing terms for
each $1,000 aggregate principal amount of Notes.
Title of Security
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Aggregate Outstanding Principal Amount(1)
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Withdrawal Deadline / Early Tender Time
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Early Tender Premium(2)
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Total Consideration (Accepted Bid Price Range)(2)(3)(4)
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7.75% Senior Notes due 2019
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$600,000,000
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5:00 p.m., New York City time, August 10, 2016
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$30.00
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$880.00 to $950.00
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(1) Aggregate principal amount outstanding as of July 27, 2016.
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(2) Per $1,000 principal amount of Notes tendered prior to the Early
Tender Time.
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(3) Includes the Early Tender Premium.
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(4) Plus accrued and unpaid interest from the last interest payment
date to, but not including, the Settlement Date.
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The “Total Consideration” for each $1,000 principal amount of Notes
validly tendered (and not validly withdrawn) pursuant to the Tender
Offer prior to the Early Tender Time and which are accepted for purchase
by the Company pursuant to the Tender Offer will be equal to the
Clearing Price (as defined below). The Total Consideration is deemed to
include an “Early Tender Premium” equal to $30.00 for
each $1,000 principal amount of Notes validly tendered (and not validly
withdrawn) and accepted for purchase pursuant to the Tender Offer. The
“Tender Offer Consideration” for each $1,000 principal amount of Notes
validly tendered pursuant to the Tender Offer after the Early Tender
Time and prior to the Expiration Time and accepted for purchase pursuant
to the Tender Offer will be equal to the Total Consideration minus the
Early Tender Premium. Tendered Notes may be validly withdrawn at any
time prior to 5:00 p.m., New York City time, on August 10, 2016, unless
extended by the Company (such date and time, as the same may be
extended, the “Withdrawal Deadline”), but not thereafter. In addition to
the Total Consideration or the Tender Offer Consideration, as
applicable, holders who validly tender (and do not validly withdraw)
Notes that are accepted for purchase by the Company pursuant to the
Tender Offer will also receive a cash payment representing the accrued
and unpaid interest on such Notes from the last interest payment date
to, but not including, the Settlement Date (as defined below) for such
Notes.
The Tender Offer is being conducted, and the Clearing Price will be
determined, pursuant to a modified “Dutch Auction.” This means that
holders who elect to participate in the Tender Offer must specify the
minimum Total Consideration they would be willing to receive in exchange
for each $1,000 principal amount of Notes they choose to tender in the
Tender Offer. The price that holders specify for each $1,000 principal
amount of Notes must be expressed in increments of $0.50, and may not be
not less than $880.00 and not more than $950.00 per $1,000 principal
amount of such Notes. Any bid price specified by a tendering holder with
respect to Notes validly tendered after the Early Tender Time and prior
to the Expiration Time shall be used for purposes of calculating the
Clearing Price; however, holders who so tender shall be eligible to
receive only the Tender Offer Consideration (and will not be eligible to
receive the Early Tender Premium) pursuant to the Tender Offer, subject
to proration as described below.
The “Settlement Date” with respect to the Tender Offer will be the date
that the Company settles all Notes accepted for purchase pursuant to the
Tender Offer, which is expected to be the business day following the
Expiration Time. No tenders of Notes submitted after the Expiration Time
will be valid or accepted.
The Company, if it accepts Notes for purchase in the Tender Offer, will
accept Notes validly tendered (and not validly withdrawn) prior to the
Expiration Time in order of lowest to highest bid prices specified by
tendering holders (in increments of $0.50), and will select the lowest
single bid price (the “Clearing Price”) for all tenders of Notes prior
to the Expiration Time such that, for all tenders of Notes whose bid
price is equal to or less than such Clearing Price, the Company will be
able to accept for purchase an aggregate principal amount of Notes up to
the Tender Cap or, if the aggregate principal amount of all Notes
validly tendered (and not validly withdrawn) prior to the Expiration
Time is less than the Tender Cap, the Clearing Price will be the highest
bid price with respect to any Notes validly tendered (and not validly
withdrawn). All bid prices at which Notes are validly tendered (and not
validly withdrawn) prior to the Expiration Time will be used for the
purpose of determining the Clearing Price and proration as described
below. The Company will pay the same Total Consideration (less the Early
Tender Premium for any Notes tendered after the Early Tender Time and
prior to the Expiration Time) for all Notes validly tendered (and not
validly withdrawn) below the Clearing Price and accepted for purchase,
upon the terms and subject to the conditions of the Tender Offer, taking
into account prorationing as described below.
If the aggregate principal amount of Notes validly tendered (and not
validly withdrawn) prior to the Expiration Time with a bid price equal
to or less than the Clearing Price exceeds the Tender Cap, then the
Tender Offer will be oversubscribed and, subject to the terms and
conditions of the Tender Offer, the Company will accept for purchase:
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first, Notes validly tendered (and not validly withdrawn) with a bid
price less than the Clearing Price; and
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second, Notes validly tendered (and not validly withdrawn) with a bid
price equal to the Clearing Price on a prorated basis, according to
the principal amount of such Notes,
such that the Company purchases an aggregate principal amount of Notes
up to the Tender Cap. All Notes not accepted as a result of prorationing
and all Notes tendered at prices in excess of the Clearing Price will be
rejected from the Tender Offer and will be returned to tendering holders
at the Company’s expense promptly following the earlier of the
Expiration Time or the date on which the Tender Offer is terminated.
If the Tender Offer is not oversubscribed, the Company will accept for
purchase all Notes validly tendered (and not validly withdrawn) prior to
the Expiration Time, subject to the terms and conditions of the Tender
Offer.
The Company expressly reserves the right, but is not obligated, to
increase the Tender Cap in its sole discretion without extending the
Withdrawal Deadline or otherwise reinstating withdrawal rights of
holders. The Tender Offer is not conditioned upon any minimum number of
Notes being tendered; however, the Tender Offer is subject to a number
of other terms and conditions, including the Financing Condition and the
Credit Agreement Amendment Condition (as such terms are defined in the
Offer to Purchase). There can be no assurance that the Tender Offer will
be consummated.
The complete terms and conditions of the Tender Offer are described in
the Offer to Purchase dated July 28, 2016, copies of which may be
obtained from D.F. King & Co., Inc., the tender agent and information
agent for the Tender Offer, by calling (877) 732-3617 (U.S. toll-free)
or by emailing cwei@dfking.com.
We have retained Goldman, Sachs & Co. as the dealer manager for the
Tender Offer. Questions regarding the terms of the Tender Offer may be
directed to the Liability Management Group of Goldman, Sachs & Co. by
calling (800) 828-3182 (toll free).
None of the Company, our board of directors (or any committee thereof),
the dealer manager, the tender agent, the information agent, the trustee
for the Notes or their respective affiliates is making any
recommendation as to whether or not holders of the Notes should tender
all or any portion of their Notes in the Tender Offer.
This announcement is not an offer to purchase or a solicitation of an
offer to sell with respect to any securities. The Tender Offer is being
made solely by the Offer to Purchase dated July 28, 2016. The Tender
Offer is not being made to holders of Notes in any jurisdiction in which
the making or acceptance thereof would not be in compliance with the
securities, blue sky or other laws of such jurisdiction.
Clayton Williams Energy, Inc., incorporated in Delaware in 1991, is an
independent oil and gas company engaged in the exploration for and
production of oil and natural gas primarily in Texas and New Mexico. We
are an oil and gas operator with a strategic focus on developmental
drilling in prolific oil shale provinces. We have significant holdings
in two of the major oil shale plays in the United States, being the
Wolfcamp Shale in the Southern Delaware Basin of West Texas and the
Eagle Ford Shale in the Giddings Area of East Central Texas. Additional
information may be found at www.claytonwilliams.com.
The information on our website is not part of the Offer to Purchase.
Cautionary Statements:
This press release does not constitute an offer to sell or the
solicitation of an offer to buy any notes nor shall there be any sale of
notes in any state in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities
laws of any such state.
Various statements in this release, including those that express a
belief, expectation or intention, may be considered forward-looking
statements (as defined in Section 21E of the Securities Exchange Act of
1934, as amended) that involve risks and uncertainties that could cause
actual results to differ materially from projected results. Accordingly,
investors should not place undue reliance on forward-looking statements
as a prediction of actual results. The forward-looking statements may
include projections and estimates concerning the timing and success of
specific projects and our future production, revenues, income and
capital spending. When we use the words “believe,” “intend,” “expect,”
“may,” “should,” “anticipate,” “could,” “estimate,” “plan,” “predict,”
“project,” or their negatives, or other similar expressions, the
statements which include those words are usually forward-looking
statements. When we describe strategy that involves risks or
uncertainties, we are making forward-looking statements. The
forward-looking statements in this press release, if any, speak only as
of the date of this press release. We specifically disclaim all
responsibility to publicly update any information contained in a
forward-looking statement or any forward-looking statement except as
required by law. We have based these forward-looking statements on our
current expectations and assumptions about future events. While our
management considers these expectations and assumptions to be
reasonable, they are inherently subject to significant business,
economic, competitive, regulatory and other risks, contingencies and
uncertainties, most of which are difficult to predict and many of which
are beyond our control. These risks, contingencies and uncertainties
relate to, among other matters, the factors discussed in our Form 10-K
for the year ended December 31, 2015 under “Risk Factors,” as updated by
any subsequent Forms 10-Q, which are on file at the Securities and
Exchange Commission.
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