Item 1.01
|
Entry into a Material Definitive Agreement.
|
Travis Peak Resources Purchase and Sale Agreement
On December 8, 2017, Eclipse
Resources-PA,
LP (
Eclipse PA
), a wholly owned subsidiary
of Eclipse Resources Corporation (the
Company
), and the Company entered into a Purchase and Sale Agreement (the
Travis Peak Agreement
) with Travis Peak Resources, LLC (
Travis Peak
). Pursuant
to the Travis Peak Agreement, Eclipse PA agreed to purchase certain oil and gas leases, wells and other oil and gas rights and interests held by Travis Peak covering approximately 44,500 net acres located in the counties of Tioga and Potter in the
Commonwealth of Pennsylvania (such transaction, the
Travis Peak Transaction
). The purchase price for the Travis Peak Transaction is $93.7 million (subject to customary adjustments) (the
Purchase Price
) and
is payable entirely in shares (the
Shares
) of the Companys common stock, par value $0.01 per share (the
Common Stock
). Pursuant to the Travis Peak Agreement, the number of Shares to be issued to Travis
Peak will equal the Purchase Price divided by the 30
consecutive-day
volume weighted average price per share of the Common Stock ending on the second trading day immediately preceding the closing date (the
Closing Date VWAP
);
provided
, that the Travis Peak Agreement includes a collar mechanism that provides if the Closing Date VWAP is less than $2.35, then the Closing Date VWAP will equal $2.35 and if the Closing Date VWAP is
more than $2.60, then the Closing Date VWAP will equal $2.60. The Travis Peak Agreement also contains customary representations, warranties, covenants and indemnities by the parties.
The Company expects the Travis Peak Transaction to close in January 2018, subject to the satisfaction of customary closing conditions;
provided
, that
the Travis Peak Transaction will have an effective date of September 1, 2017 and contemplates a second closing for purposes of curing any title or environmental defects with respect to the properties being acquired by Eclipse PA.
In connection with the closing of the Travis Peak Transaction, the Company and Eclipse PA have agreed to enter into a registration rights agreement with
Travis Peak pursuant to which, among other things, (i) the Company will use commercially reasonable efforts to prepare and file with the Securities and Exchange Commission a Registration Statement of the Company (the
Mandatory Shelf
Registration Statement
) on Form
S-3
(or, if the Company is not eligible to use Form
S-3,
on Form
S-1)
no later than
March 31, 2018 to register the offer and resale, on a continuous or delayed basis pursuant to Rule 415 under the Securities Act of 1933, as amended (the
Securities Act
), of the Shares to be issued to Travis Peak under the
Travis Peak Agreement, and (ii) if the Company proposes to register an offering of Common Stock at a time when the Mandatory Shelf Registration Statement is not then effective (subject to certain exceptions), the Company will notify all holders
of registrable securities to allow them to include a specified number of their shares of Common Stock in that offering.
The foregoing description of the
Travis Peak Agreement does not purport to be complete and is qualified in its entirety by reference to the complete text of the Travis Peak Agreement, a copy of which is attached hereto as Exhibit 2.1 and incorporated herein by reference.
Cardinal Midstream Option Agreement
On December 8,
2017, the Company, Eclipse PA and Eclipse Resources Midstream, LP, a wholly owned subsidiary of the Company (
Eclipse Midstream
) entered into an Option Agreement (the
Option Agreement
), with Cardinal Midstream
II, LLC (
Cardinal Parent
), Cardinal NE Holdings, LLC, a wholly owned subsidiary of Cardinal Parent (
Cardinal Holdings
) and Cardinal NE Midstream, LLC, a wholly owned subsidiary of Cardinal Holdings, pursuant to
which, among other things, Eclipse Midstream acquired an exclusive right and option to purchase from Cardinal Parent all of the outstanding equity interests of Cardinal Holdings for an aggregate purchase price of $18.3 million to be paid in
cash in accordance with the form of Membership Interests Purchase Agreement (the
Membership Interests Purchase Agreement
and, together with the Travis Peak Agreement and the Option Agreement, the
Transaction
Documents
), by and among Cardinal Parent, Cardinal Holdings, Eclipse Midstream and the Company, attached thereto (the
Cardinal Transaction
and, together with the Travis Peak Transaction, the
Proposed
Transactions
). The Option Agreement contains customary representations, warranties and covenants and provides that the option granted to Eclipse Midstream will begin on the closing of the Travis Peak Transaction and expire as of the close
of business on June 30, 2018 if not exercised prior to such time.
The foregoing descriptions of the Option Agreement and the Membership Interests Purchase Agreement do not purport
to be complete and are qualified in their entirety by reference to the complete text of the Option Agreement and the Membership Interests Purchase Agreement (which is Exhibit A to the Option Agreement), copies of which are attached hereto as Exhibit
2.2 and incorporated herein by reference.
Relationships
Travis Peak and Cardinal Parent are affiliates of EnCap Investments, L.P. (
EnCap
). EnCap has representatives on the Companys board of
directors, and affiliates of EnCap collectively beneficially own a majority of the Common Stock. The Proposed Transactions, the Transaction Documents and the other transactions contemplated thereby were approved by a special committee of the
Companys board of directors, which committee consists solely of independent and disinterested directors.