Permian Resources Corporation Announces Pricing of Secondary Public Offering of Class A Common Stock
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From a financial perspective, the offering of 48,500,000 shares by affiliates of Permian Resources is a significant liquidity event for the selling stakeholders. The sale at $15.76 per share represents a substantial capital reallocation that could influence the company's stock liquidity and potentially its market price. It is important to note that Permian Resources is not issuing new shares or receiving proceeds from this transaction, which indicates that the company's capital structure will remain unchanged. However, the repurchase and cancellation of Class C Common Stock in exchange for OpCo Units could be seen as a move to simplify the ownership structure and possibly enhance corporate governance.
Investors should monitor the impact of this transaction on the company's stock performance, considering that large offerings can sometimes lead to short-term price volatility. Additionally, the involvement of a reputable underwriter like Goldman Sachs & Co. LLC could signal market confidence in the transaction, potentially stabilizing the stock price post-offering.
Examining the market implications of such an offering, it is clear that the secondary sale by major investors and management members can be interpreted in various ways. On one hand, it could indicate that these insiders believe the stock is fairly valued or potentially overvalued at current levels. On the other hand, it might simply reflect a diversification strategy by the selling shareholders. The market's reaction will largely depend on the perception of the investors' confidence in the company's future prospects.
Furthermore, the timing and size of the offering can affect the supply-demand dynamics in the market. A large offering like this could increase the supply of shares, potentially putting downward pressure on the stock price in the short term. Long-term effects, however, will hinge on the company's operational performance and the oil and gas market conditions, which are influenced by a myriad of geopolitical and economic factors.
Legally, the transaction is structured to comply with the Securities Act of 1933, ensuring that all regulatory requirements are met for such a public offering. The fact that the offering is not contingent upon the Concurrent OpCo Unit Purchase, but the purchase is contingent upon the completion of the offering, is a strategic move that provides a safeguard for the company. This structure allows the company to proceed with the unit purchase only after ensuring the success of the equity offering, mitigating potential risks associated with the transaction.
Investors should be aware that the transaction's legality does not necessarily equate to investment security. They should consider the offering's terms and the concurrent unit purchase's implications, as these could affect their ownership rights and the value of their investment. The involvement of a high-profile underwriter and adherence to SEC regulations, however, are positive indicators of the offering's legitimacy.
Concurrently with the closing of the offering, the Company has agreed to purchase (the “Concurrent OpCo Unit Purchase”) from certain of the Selling Stockholders an aggregate 2,000,000 common units representing limited liability company interests (“OpCo Units”) in Permian Resources Operating, LLC, a
Goldman Sachs & Co. LLC is serving as the underwriter for the offering. The offering is expected to close on March 6, 2024, subject to customary closing conditions.
The offering is being made pursuant to a registration statement previously filed by the Company with the
The offering is being made only by means of a prospectus and prospectus supplement that meet the requirements under the Securities Act of 1933, as amended (the “Securities Act”). Copies of the preliminary prospectus supplement and accompanying base prospectus and final prospectus supplement, when available, may be obtained from: Goldman Sachs & Co. LLC, Prospectus Department, 200 West Street,
This press release shall not constitute an offer to sell or a solicitation of an offer to buy shares of Class A common stock or any other securities, nor shall there be any sale of securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful without registration or qualification under the securities laws of any such state or jurisdiction.
About Permian Resources
Headquartered in
Cautionary Note Regarding Forward-Looking Statements
The information in this press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact included in this press release, regarding the completion of the offering and the Concurrent OpCo Unit Purchase, the Company’s strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives and expectations of management regarding the Company or managements’ equity holdings or compensation arrangements are forward-looking statements. When used in this press release, the words “could,” “may,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “project,” “goal,” “plan,” “target” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These forward-looking statements are based on management’s current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events. Be cautioned that these forward-looking statements are subject to all of the risk and uncertainties, most of which are difficult to predict and many of which are beyond Permian Resources’ control, incident to the development, production, gathering and sale of oil and natural gas. These risks include, but are not limited to, commodity price volatility, inflation, lack of availability of drilling and production equipment and services and risks relating to the Company’s ability to realize the anticipated benefits and synergies of its merger with Earthstone Energy, Inc. Actual results or the referenced outcomes could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including, but not limited to, those set forth in the Company’s filings with the SEC, including the prospectus relating to the offering, the registration statement described above and its Annual Report on Form 10-K for the fiscal year ended December 31, 2023, under the caption “Risk Factors,” as may be updated from time to time in the Company’s periodic filings with the SEC. Any forward-looking statement in this press release speaks only as of the date of this release. The Company undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by any applicable securities laws.
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Hays Mabry – Sr. Director, Investor Relations
Mae Herrington – Engineering Advisor, Investor Relations
(832) 240-3265
ir@permianres.com
Source: Permian Resources Corporation
FAQ
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