Vital Energy, Inc., a Delaware corporation (NYSE: VTLE) (“Vital
Energy” or the “Company”) today announced the early results of its
previously announced cash tender offers (the “Tender Offers”) to
purchase for cash up to $550.0 million aggregate principal amount
(as such aggregate principal amount may be increased or decreased
by the Company, the “Aggregate Maximum Tender Amount”) of (i) up to
$475.0 million (the “2028 Cap”) of its 10.125% senior notes due
2028 (the “2028 Notes”) and (ii) up to $75.0 million (the “2030
Cap” and, together with the 2028 Cap, the “Series Caps”) of its
9.750% senior notes due 2030 (the “2030 Notes” and, together with
the 2028 Notes, the “Tender Notes”), subject to the terms and
conditions set forth in the Offer to Purchase, dated March 14, 2024
(as amended, the “Offer to Purchase”). In addition, the Company
announced that it has amended the Tender Offers to remove the 2028
Cap and the Aggregate Maximum Tender Amount (as a result, it will
accept any and all 2028 Notes tendered in the Tender Offers) and
increase the 2030 Cap to $100.0 million aggregate principal amount.
Except as described in this press release, the terms and conditions
of the Tender Offers set forth in the Offer to Purchase remain
unchanged. Capitalized terms used but not defined herein have the
meaning given to them in the Offer to Purchase.
According to information provided by Global
Bondholder Services Corporation (“GBS”), the information and tender
agent for the Tender Offers, as of 5:00 p.m., New York City time,
on March 27, 2024 (such date and time, the “Early Tender Date”),
the Company had received valid and not withdrawn tenders from
registered holders (each, a “Holder” and collectively, the
“Holders”) of (i) $431,150,000 in aggregate principal amount of the
2028 Notes, representing approximately 61.57% of the aggregate
principal amount outstanding of the 2028 Notes and (ii)
$197,636,000 in aggregate principal amount of the 2030 Notes,
representing approximately 39.53% of the aggregate principal amount
outstanding of the 2030 Notes. Subject to the terms and conditions
of the Tender Offers, the Company expects to accept for purchase on
the applicable Early Settlement Date described below all 2028 Notes
validly tendered and not withdrawn at or prior to the Early Tender
Date. Because the aggregate principal amount of 2030 Notes validly
tendered and not withdrawn at or prior to the Early Tender Date
exceeded the 2030 Cap, the aggregate principal amount of 2030 Notes
to be accepted would be subject to proration (using a proration
rate of approximately 38.11% and subject to adjustment to maintain
the authorized denomination of the Tender Notes). Subject to
satisfaction of the conditions to the Tender Offers, including
settlement of the previously announced offering of $800.0 million
aggregate principal amount of 7.875% senior notes due 2032, which
is scheduled for March 28, 2024, the Company expects the Early
Settlement Date for the 2028 Notes to be March 29, 2024 and expects
the Early Settlement Date for the 2030 Notes to occur during the
week of April 1, 2024. In addition to the Total Consideration,
Holders whose Tender Notes are accepted for purchase on an Early
Settlement Date will also receive accrued and unpaid interest
(“Accrued Interest”) from the last interest payment date up to, but
not including, the Early Settlement Date.
The following table sets forth the Tender Offer
Consideration, the Early Tender Payment and the Total Consideration
for the Tender Offers:
Title of Notes |
CUSIP Numbers/ISIN |
Aggregate Principal Amount
Outstanding(1) |
Series Cap(2) |
Dollars per $1,000 Principal Amount of Notes |
Tender Offer
Consideration(3) |
Early Tender Premium |
Total Consideration(3)(4) |
10.125% Senior Notes due 2028 |
516806AG1 / US516806AG11 |
$700,309,000 |
N/A |
$1,001.88 |
$50.0 |
$1,051.88 |
9.750% Senior Notes due 2030 |
516806AJ5 / US516806AJ59 |
$500,000,000 |
$100,000,000 |
$1,042.50 |
$50.0 |
$1,092.50 |
(1) As of the date of the Tender Offers.(2) As
amended hereby.(3) Holders will also receive accrued and unpaid
interest from the applicable last interest payment with respect to
the Tender Notes accepted for purchase to, but not including, the
Early Settlement Date (as defined below) or the Final Settlement
Date (as defined below), as applicable.(4) Includes the Early
Tender Premium.
The Withdrawal Deadline for the Tender Offers was
5:00 p.m., New York City time, on March 27, 2024. As a result,
Tender Notes tendered pursuant to the Tender Offers may no longer
be withdrawn, unless the Withdrawal Deadline is extended by the
Company or as required by law.
The obligation of the Company to accept for
purchase, and to pay for, Tender Notes validly tendered pursuant to
the Tender Offers is subject to, and conditioned upon, the
satisfaction or waiver of certain conditions as set forth in the
Offer to Purchase, in the sole and absolute discretion of the
Company. If such conditions shall not have been satisfied (or
waived by the Company), no payments will be made to tendering
Holders on the Early Settlement Date. The Tender Offers are not
conditioned on any minimum principal amount of Tender Notes being
tendered. The Tender Offers and its provisions may be amended,
extended, terminated, waived or withdrawn by the Company in its
sole and absolute discretion.
In addition to the above and subject to the
settlement of the senior notes offering described above, the
Company announced that it intends to redeem all 2028 Notes not
purchased in the Tender Offers on or about April 29, 2024, at a
redemption price of 105.063% of the principal amount thereof, plus
accrued and unpaid interest to the redemption date. The redemption
will be effected by means of a notice of redemption given in
accordance with the indenture governing the 2028 Notes. The
redemption will be funded with proceeds of the senior notes
offering referred to above. This press release does not constitute
a notice of redemption.
None of the Company, the trustees for the Tender
Notes, any paying agent, transfer agent or listing agent under the
Tender Notes, BofA Securities, Inc., as the dealer manager, the
information and tender agent, any of their respective subsidiaries
or affiliates or any of their respective directors, officers,
employees or representatives has made or makes any recommendation
to Holders as to whether or not to tender all or any portion of
their Tender Notes, and none of the foregoing has authorized any
person to make any such recommendation.
The Company has retained BofA Securities, Inc. to
serve as the sole dealer manager for the Tender Offers. The Company
has retained GBS to act as the information and tender agent in
respect of the Tender Offers.
For additional information regarding the terms of
the Tender Offers, please contact BofA Securities, Inc. at its
telephone number set forth on the back cover page of the Offer to
Purchase. Copies of the Offer to Purchase may be obtained from GBS
by calling (212) 430-3774 (banks and brokers) or (855) 654-2014
(all others), or visiting http://www.gbsc-usa.com/vital online.
This notice does not constitute or form part of any
offer or invitation to purchase or sell, or any solicitation of any
offer to sell or purchase, the Tender Notes or any other securities
in the United States or any other jurisdiction, and neither this
notice nor any part of it, nor the fact of its release, shall form
the basis of, or be relied on or in connection with, any contract
therefor. The Tender Offers are made only by and pursuant to the
terms and conditions of the Offer to Purchase and the information
in this notice is qualified by reference to the Offer to
Purchase.
This press release does not constitute an offer to
buy or the solicitation of an offer to sell any securities in any
jurisdiction or in any circumstances in which such offer or
solicitation is unlawful. In those jurisdictions where the
securities, blue sky or other laws require the Tender Offers to be
made by a licensed broker or dealer, the Tender Offers will be
deemed to be made by the dealer manager or one or more registered
brokers or dealers licensed under the laws of such
jurisdiction.
About Vital EnergyVital Energy,
Inc. is an independent energy company with headquarters in Tulsa,
Oklahoma. The Company’s business strategy is focused on the
acquisition, exploration and development of oil and natural gas
properties in the Permian Basin of West Texas.
Forward-Looking StatementsThis
press release contains forward-looking statements as defined under
Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. All
statements, other than statements of historical facts, that address
activities that Vital Energy assumes, plans, expects, believes,
intends, projects, indicates, enables, transforms, estimates or
anticipates (and other similar expressions) will, should or may
occur in the future are forward-looking statements. The
forward-looking statements are based on management’s current
belief, based on currently available information, as to the outcome
and timing of future events. Such statements are not guarantees of
future performance and involve risks, assumptions and
uncertainties. General risks relating to Vital Energy include, but
are not limited to, continuing and worsening inflationary pressures
and associated changes in monetary policy that may cause costs to
rise; changes in domestic and global production, supply and demand
for commodities, including as a result of actions by the
Organization of Petroleum Exporting Countries and other producing
countries (“OPEC+”) and the Russian-Ukrainian or Israeli-Hamas
military conflicts, the decline in prices of oil, natural gas
liquids and natural gas and the related impact to financial
statements as a result of asset impairments and revisions to
reserve estimates, reduced demand due to shifting market perception
towards the oil and gas industry; competition in the oil and gas
industry; the ability of the Company to execute its strategies,
including its ability to successfully identify and consummate
strategic acquisitions at purchase prices that are accretive to its
financial results and to successfully integrate acquired
businesses, assets and properties, pipeline transportation and
storage constraints in the Permian Basin, the effects and duration
of the outbreak of disease, and any related government policies and
actions, long-term performance of wells, drilling and operating
risks, the possibility of production curtailment, the impact of new
laws and regulations, including those regarding the use of
hydraulic fracturing, and under the Inflation Reduction Act (the
“IRA”), including those related to climate change, the impact of
legislation or regulatory initiatives intended to address induced
seismicity on our ability to conduct our operations; uncertainties
in estimating reserves and production results; hedging activities,
tariffs on steel, the impacts of severe weather, including the
freezing of wells and pipelines in the Permian Basin due to cold
weather, possible impacts of litigation and regulations, the impact
of Vital Energy’s transactions, if any, with its securities from
time to time, the impact of new environmental, health and safety
requirements applicable to Vital Energy’s business activities, the
possibility of the elimination of federal income tax deductions for
oil and gas exploration and development and imposition of any
additional taxes under the IRA or otherwise, and other factors,
including those and other risks described in its Annual Report on
Form 10-K for the year ended December 31, 2023 and those set forth
from time to time in other filings with the Securities and Exchange
Commission (“SEC”). These documents are available through Vital
Energy’s website at www.vitalenergy.com under the tab “Investor
Relations” or through the SEC’s Electronic Data Gathering and
Analysis Retrieval System at www.sec.gov. Any of these factors
could cause Vital Energy’s actual results and plans to differ
materially from those in the forward-looking statements. Therefore,
Vital Energy can give no assurance that its future results will be
as estimated. Any forward-looking statement speaks only as of the
date on which such statement is made. Vital Energy does not intend
to, and disclaims any obligation to, correct, update or revise any
forward-looking statement, whether as a result of new information,
future events or otherwise, except as required by applicable
law.
Investor Contact:Ron
Hagood918.858.5504ir@vitalenergy.com
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