Northern Oil and Gas, Inc. Announces Launch of Consent Solicitation to Holders of its Senior Secured Second Lien Notes Due 2023 and Launch of a New Senior Secured Credit Facility
Northern Oil and Gas, Inc. (NYSE American: NOG) (the “Company” or
“Northern”) announced today the commencement of a consent solicitation
(the “Consent Solicitation”) to solicit the consent of holders of its
outstanding Senior Secured Second Lien Notes due 2023 (the “Senior
Secured Notes”) for amendments to the indenture governing the Senior
Secured Notes (the “Indenture”) and the related intercreditor agreement
(the “Proposed Amendments”). In addition, Northern has engaged RBC
Capital Markets as Left Lead Arranger, Bookrunner and Administrative
Agent on a proposed $425 million Senior Secured Revolving Credit
Facility (the “Credit Facility”) to retire its current $360 million
first lien credit facility.
HIGHLIGHTS
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The Proposed Amendments to the Indenture will allow for entry into the
new Credit Facility and permit the issuance of additional Senior
Secured Notes.
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The $425 million Credit Facility and additional Senior Secured Note
capacity will provide increased liquidity and financial flexibility to
support the continued consolidation of non-operated assets in the
Williston Basin.
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Retirement of the current first lien facility will lower Northern’s
cost of capital, increase free cash flow and allow Northern to pay
down additional debt in the future.
MANAGEMENT COMMENT
“The outstanding progress year-to-date is allowing us to return to
traditional sources of lower cost financing sooner than planned,”
commented Northern’s Chief Executive Officer, Brandon Elliott. “This
increased financial flexibility will help continue our consolidation of
non-operated assets in the Williston Basin.”
“This new Credit Facility, combined with our pending acquisitions, will
lead to a substantially improved balance sheet as we exit 2018. We
expect this to lower our cost of capital, increase future free cash flow
and allow us to more efficiently allocate capital as we continue to
evaluate additional consolidation opportunities,” commented Northern’s
Chief Financial Officer, Nicholas O’Grady. “This is a momentous step in
Northern’s progression and serves to accelerate Northern’s ability to
execute upon its stated growth strategy.”
AMENDMENT & CONSENT
The Proposed Amendments would, among other items, (a) amend the
Indenture to (i) incorporate customary mechanics for the issuance of
additional Senior Secured Notes thereunder; (ii) provide for the entry
into a new Credit Facility; (iii) permit the Company to make certain
Restricted Payments; and (iv) incorporate updates to the reporting,
debt, hedging, investments and additional collateral covenants and (b)
permit certain corresponding changes to the related intercreditor
agreement.
The Consent Solicitation will expire at 5:00 p.m., New York City time,
on September 17, 2018, or such later time and date to which the
solicitation is extended or earlier terminated (the “Expiration Time”).
Consents with respect to the Senior Secured Notes may not be revoked
after the Expiration Time. The Consent Solicitation is contingent upon
the satisfaction of certain conditions, including, without limitation,
the receipt of consents of holders of at least a majority of the
aggregate principal amount of the Senior Secured Notes outstanding
(excluding any Senior Secured Notes held by the Company or its
affiliates) to the Proposed Amendments by the Expiration Time. If any of
the conditions to the Consent Solicitation is not satisfied, the Company
is not obligated to accept any consent in the Consent Solicitation and
may, in its sole discretion, terminate, extend or amend the Consent
Solicitation.
Subject to the terms and conditions of the Consent Solicitation, upon
receipt of consents of holders of more than 50% of the aggregate
principal amount of outstanding Senior Secured Notes (excluding any
Senior Secured Notes held by the Company or its affiliates) to the
Proposed Amendments, holders of Senior Secured Notes who validly deliver
(and do not validly revoke) their consents prior to the Expiration Time
(each such Holder a “Consenting Holder”) will receive consent
consideration equal to $0.015 per $1.00 in principal amount of Senior
Secured Notes held by such Consenting Holder (the “Consent Fee”). The
payment of the Consent Fees is subject to the terms and conditions of
the Consent Solicitation.
The complete terms and conditions of the Consent Solicitation are set
forth in the Consent Solicitation Statement that is being sent to the
holders of the Senior Secured Notes.
RBC Capital Markets is acting as the solicitation agent for the Consent
Solicitation. Ipreo LLC is acting as the information agent and
tabulation agent for the Consent Solicitation. Questions regarding the
Consent Solicitation may be directed to RBC Capital Markets by phone at
(877) 381-2099 (toll free) or (212) 618-7843 (collect) or by e-mail at liability.management@rbccm.com.
Requests for Consent Solicitation Statements may be directed to Ipreo
LLC at (866) 406-2283 (toll free) or by email to consent@ipreo.com.
This press release does not constitute an offer to sell, or a
solicitation of an offer to buy, any security. No offer, solicitation or
sale will be made in any jurisdiction in which such an offer,
solicitation or sale would be unlawful. None of the Company, the
solicitation agent or the information and tabulation agent, makes any
recommendation as to whether holders should deliver consents to the
Proposed Amendments. Each holder must make its own decision as to
whether or not to deliver consents to the Proposed Amendments.
ABOUT NORTHERN OIL AND GAS
Northern Oil and Gas, Inc. is an exploration and production company with
a core area of focus in the Williston Basin Bakken and Three Forks play
in North Dakota and Montana. More information about Northern Oil and
Gas, Inc. can be found at www.NorthernOil.com.
SAFE HARBOR
This press release contains forward-looking statements regarding future
events and future results that are subject to the safe harbors created
under the Securities Act of 1933 (the “Securities Act”) and the
Securities Exchange Act of 1934 (the “Exchange Act”). All statements
other than statements of historical facts included in this release
regarding the Company’s preliminary financial condition and results of
operations, business strategy, plans and objectives of management for
future operations, industry conditions, indebtedness covenant
compliance, timing and benefits of pending acquisitions, and related
issuances of common stock are forward-looking statements. When used in
this release, forward-looking statements are generally accompanied by
terms or phrases such as “estimate,” “project,” “predict,” “believe,”
“expect,” “continue,” “anticipate,” “target,” “could,” “plan,” “intend,”
“seek,” “goal,” “will,” “should,” “may” or other words and similar
expressions that convey the uncertainty of future events or outcomes.
Items contemplating or making assumptions about actual or potential
future production and sales, market size, collaborations, and trends or
operating results also constitute such forward-looking statements.
Forward-looking statements involve inherent risks and uncertainties, and
important factors (many of which are beyond the Company’s control) that
could cause actual results to differ materially from those set forth in
the forward-looking statements, including the following: changes in
crude oil and natural gas prices, the pace of drilling and completions
activity on the Company’s current properties and properties pending
acquisition, the Company’s ability to acquire additional development
opportunities, changes in the Company’s reserves estimates or the value
thereof, general economic or industry conditions, nationally and/or in
the communities in which the Company conducts business, changes in the
interest rate environment, legislation or regulatory requirements,
conditions of the securities markets, the Company’s ability to
consummate any pending acquisition transactions, other risks and
uncertainties related to the closing of pending acquisition
transactions, the Company’s ability to raise or access capital, changes
in accounting principles, policies or guidelines, financial or political
instability, acts of war or terrorism, and other economic, competitive,
governmental, regulatory and technical factors affecting the Company’s
operations, products, services and prices. Additional information
concerning potential factors that could affect future financial results
is included in our Annual Report on Form 10-K for the fiscal year ended
December 31, 2017, as updated from time to time in amendments and
subsequent reports filed with the SEC.
The Company has based these forward-looking statements on its current
expectations and assumptions about future events. While 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 the
Company’s control. The Company does not undertake any duty to update or
revise any forward-looking statements, except as may be required by the
federal securities laws.
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