Permian Resources Corp. commenced a cash tender offer for its outstanding $300 million 7.75% senior notes due 2026. The offer follows the Midland, Texas-based company’s purchase of Delaware Basin assets from Occidental Petroleum for $817.5 million, announced July 29.
The purchase price for each $1,000 principal amount of the notes validly tendered, and not validly withdrawn, will be determined in the terms of Permian Resources’ offer to purchase.
Permian Resources is also offering for sale $750 million in aggregate principal amount of senior unsecured notes due 2033.
The company intends to fund the Occidental asset purchase price via a new $400 million equity offering, proceeds from the proposed notes and cash on hand, Fitch Ratings said on July 29. The remaining proceeds from the notes will be used to tender and redeem PR’s existing $300 million 7.750% notes due 2026, repay borrowings under the credit facility and for general corporate purposes.
Fitch Ratings said Permian Resources’ credit rating was unchanged following the acquisition and the proposed debt issuance.
Fitch said that the “credit-friendly” funding for the transaction will allow Permian Resources to maintain conservative EBITDA leverage metrics of approximately 1x pro forma the transaction and below 1.5x at Fitch’s mid-cycle $57/bbl WTI oil price.
The tender offer for the 7.75% senior notes is set to expire at 5 p.m. EST on Aug. 2.