WildHorse Resource Development Corporation Announces Closing of the Eagle Ford Acquisition, Borrowing Base Increase to $650 Million, and Election of Board Members
WildHorse Resource Development Corporation (NYSE:WRD), today announced
the closing of the previously announced acquisition of approximately
111,000 net acres in the East Texas Eagle Ford from the Anadarko
Petroleum Corporation (“APC”) and affiliates of Kohlberg Kravis Roberts
& Co. L.P. (“KKR”). After customary purchase price adjustments, WRD paid
$594.4 million to close the transaction, consisting of $533.6 million in
cash and approximately 5.5 million shares of WRD common stock valued at
$60.8 million.
“With the closing of this strategic acquisition, WildHorse is now the
second largest operator in the Eagle Ford trend with approximately
385,000 net acres. The acquisition acreage almost perfectly overlaps our
existing position and is 95% held by production. Furthermore, we have
added 711 net locations at our 91 boe per foot type curve which gives us
over 8 years of additional drilling inventory at our current pace,” said
Jay Graham, Chairman and Chief Executive Officer of WRD. “We are very
excited about getting to work on the consolidated position. In the
second quarter of 2017, we have already brought online 6 wells adjacent
to the acquired acreage, and we plan to drill several wells directly on
the new acreage in the third quarter. In addition, with an increase of
our borrowing base to $650 million and the closing of our preferred
stock issuance, our balance sheet remains strong, enabling us to develop
this tremendous asset,” added Jay Graham.
Borrowing Base Increased to $650 million from $450 million
WRD also announced today that the borrowing base under its $1.0 billion
multi-year revolving credit facility was increased by its 15-lender bank
group to $650 million from $450 million in connection with the closing
of the acquisition. WRD’s revolving credit facility matures in December
2021. The financial covenants remain unchanged.
Closing of Transaction Financing
In conjunction with the closing of the acquisition, WRD closed the
previously announced transaction financing of $435 million in Series A
Perpetual Convertible Preferred Stock (“Preferred Stock”) issued to The
Carlyle Group (“Carlyle”), through its U.S. buyout fund Carlyle Partners
VI. The preferred stock’s dividend of 6% is payable either in cash,
preferred stock, or a combination thereof at WRD’s option. The dividend
will terminate permanently after two and a half years if WRD’s share
price is equal to or greater than 130% of the conversion price, or
$18.07. Carlyle has a right to convert at conversion price of $13.90 in
one year, and WRD has the right to force conversion after four years of
issuance at a 140% premium to the conversion price, or $19.46.
Election of Brian A. Bernasek and Martin W. Sumner to the Board of
Directors
In connection with the closing of the transaction, WRD’s Board of
Directors has elected two representatives from The Carlyle Group to the
Board of Directors, Brian A. Bernasek and Martin W. Sumner.
Brian A. Bernasek is a Managing Director of The Carlyle Group and head
of the firm’s Global Industrial and Transportation team. Prior to
joining Carlyle in 2000, Mr. Bernasek held positions in New York with
Investcorp International, a private equity firm, and Morgan Stanley &
Co., in its Investment Banking Division. Mr. Bernasek is a graduate of
the University of Notre Dame and received his M.B.A. from the Harvard
Business School. He is currently also a member of the Board of Directors
of Accudyne Industries, Atotech BV, Novolex Holdings, Inc., and Signode
Industrial Group. He previously served on the Board of Directors of
Allison Transmission, Inc. (NYSE: ALSN), HD Supply, Inc. (NYSE:HDS) and
The Hertz Corporation (NYSE:HTZ), among others.
Martin W. Sumner is a Managing Director of The Carlyle Group where he
focuses on investment opportunities in the industrial and transportation
sectors. Mr. Sumner has been at The Carlyle Group since 2003 and has led
or been a key contributor to the firm’s energy and chemical related
investments. Prior to joining Carlyle, he held positions with Thayer
Capital Partners, a private equity firm and the strategy consulting
group of Mercer Management Consulting. Mr. Sumner received his M.B.A.
from Stanford University, where he was an Arjay Miller Scholar and a
B.S. in Economics, magna cum laude, from the Wharton School of the
University of Pennsylvania. He is currently also a member of the Board
of Directors of Atotech BV and AxleTech International. He previously
served on the Board of Directors of Axalta Coating Systems (NYSE: AXTA)
and Centennial Resource Production, among others.
Expanded 2018-19 Oil Hedge Positions in the Second Quarter of 2017
As previously noted in the company’s June presentation, WRD has
significantly increased its 2018-19 oil hedge positions in the second
quarter of 2017. WRD hedged over 4.0 million barrels of oil with a
combination of swaps and puts and now has a weighted average price of
$52.95 per barrel on approximately 5.6 million barrels of oil in 2018
and a weighted average price of $53.38 per barrel on approximately 3.7
million barrels of oil in 2019.
Based on the mid-point of 2017 guidance, WRD is hedged on approximately
62% of 2017 production for the last nine months of the year at a total
weighted average price of $53.64 per barrel of crude and $3.09 per MMBtu
of natural gas. The 2017 hedges utilize a combination of fixed price
swaps, collar contracts and put contracts which together establish
improved downside price protection, while providing upside price
participation in an improving commodity price environment.
About WildHorse Resource Development Corporation
WildHorse Resource Development Corporation is an independent oil and
natural gas company focused on the acquisition, exploration, development
and production of oil, natural gas and NGL properties primarily in the
Eagle Ford Shale in East Texas and the Over-Pressured Cotton Valley in
North Louisiana. For more information, please visit our website at www.wildhorserd.com.
Cautionary Statements and Additional Disclosures
This press release includes "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended.
Forward-looking statements can be identified by words such as
“anticipates,” “intends,” “will,” “plans,” “seeks,” “believes,”
“estimates,” “could,” “expects” and similar references to future
periods. Such forward-looking statements are subject to a number of
risks and uncertainties, many of which are beyond WRD’s control. All
statements, other than historical facts included in this press release,
that address activities, events or developments that WRD expects or
anticipates will or may occur in the future, including such things as
WRD’s future capital expenditures (including the amount and nature
thereof), business strategy and measures to implement strategy, future
drilling locations and inventory, competitive strengths, goals,
expansion and growth of WRD’s business and operations, plans, successful
consummation and integration of acquisitions and other transactions,
market conditions, references to future success, references to
intentions as to future matters and other such matters are
forward-looking statements. All forward-looking statements speak only as
of the date of this press release. Although WRD believes that the plans,
intentions and expectations reflected in or suggested by the
forward-looking statements are reasonable, there is no assurance that
these plans, intentions or expectations will be achieved. Therefore,
actual outcomes and results could materially differ from what is
expressed, implied or forecast in such statements.
WRD cautions you that these forward-looking statements are subject to
risks and uncertainties, most of which are difficult to predict and many
of which are beyond WRD’s control, incident to the exploration for and
development, production, gathering and sale of natural gas and oil.
These risks include, but are not limited to: commodity price volatility;
inflation; lack of availability of drilling and production equipment and
services; environmental risks; drilling and other operating risks;
regulatory changes; the uncertainty inherent in estimating natural gas
and oil reserves and in projecting future rates of production, cash flow
and access to capital; and the timing of development expenditures.
Information concerning these and other factors can be found in WRD’s
filings with the SEC, including its Forms 10-K, 10-Q and 8-K.
Consequently, all of the forward-looking statements made in this press
release are qualified by these cautionary statements and there can be no
assurances that the actual results or developments anticipated by WRD
will be realized, or even if realized, that they will have the expected
consequences to or effects on WRD, its business or operations. WRD has
no intention, and disclaims any obligation, to update or revise any
forward-looking statements, whether as a result of new information,
future results or otherwise.
View source version on businesswire.com: http://www.businesswire.com/news/home/20170630005576/en/
Copyright Business Wire 2017