Each one in plain English, with the numbers worked through for a shareholder.
2 Jan 2024asset acquisition disposition● NeutralMajor
On January 2, 2024 Civitas closed the Vencer acquisition of oil and gas properties in Glasscock, Martin, Midland, Reagan and Upton Counties, Texas. It paid about $1.0 billion in cash plus 7,181,527 new shares (valued at about $600 million for the purchase agreement), with $550 million more in cash due January 3, 2025; prices are subject to adjustment from a January 1, 2024 effective date. The share count is lower than the 7,289,515 first announced (the filing does not explain why). The new shares dilute existing holders, and a registration rights agreement requires Civitas to file a resale registration for them. The press release says the deferred payment is planned to be funded from cash on hand and/or credit facility borrowings.
On October 17, 2023 Civitas completed a $1.0 billion offering of 8.625% senior notes due November 1, 2030, with interest starting May 1, 2024. It expects to use the proceeds plus cash on hand to pay part of the cash price for the pending Vencer purchase, which resolves the open question of which financing would be used (notes rather than the bridge loan). If the Vencer deal does not close by January 31, 2024, or Civitas says it will not pursue it, the notes must be redeemed at 100% of face value plus accrued interest. Until then the proceeds may temporarily repay credit facility borrowings.
On October 6, 2023 Civitas signed a Fifth Amendment to its JPMorgan credit agreement, letting it borrow up to $1.5 billion more through new unsecured notes or bridge facilities by January 31, 2024 to fund the Vencer deal. It also loosened several debt, dividend/buyback and investment limits (e.g. the general debt limit from 2.50x to 3.00x leverage) and removed the minimum hedging requirement. This addresses part of the funding for the Vencer purchase; the filing does not say which financing will actually be used.
4 Oct 2023capital raising announcement● NeutralMajor
On October 3, 2023 Civitas agreed to buy oil and gas properties from Vencer Energy in Glasscock, Martin, Midland, Reagan and Upton Counties, Texas, for $2.15 billion total: $1.0 billion cash and 7,289,515 new shares (about $600 million) at closing, plus up to $550 million cash due January 3, 2025. A 7.5% deposit is in escrow and closing conditions apply. If completed, the new shares would dilute existing holders, and Vencer would get resale registration rights; the deal has not closed per this filing. This is a new acquisition following the Hibernia and Tap Rock deals.
CIVITAS RESOURCES, INC. Chief Transformation Officer Jeffrey S Kelly received 13,609 shares and a 12,509-share option grant as part of the equity award.
Tap Rock NM, NGP Tap Rock Holdings, LLC, NGP XI Mineral Holdings, LLC, NGP XI US Holdings, L.P, NGP XI Holdings GP L.L.C, NGP Natural Resources XI, L.P, GFW Energy XI, L.P, GFW XI, L.L.C, Tap Rock Resources II Legacy, LLC, NGP XII Tap Rock Holdings, LLC, NGP XII US Holdings, L.P, NGP XII Holdings GP, L.L.C, NGP Natural Resources XII, L.P, G.F.W. Energy XII, L.P, GFW XII, L.L.C, NGP Energy Capital Management, L.L.C disclosed a new substantial CIVITAS RESOURCES, INC. shareholding (7.76% of votes).
2 Aug 2023asset acquisition disposition● NeutralMajor
On August 2, 2023 Civitas closed both acquisitions signed in June: Hibernia for about $2.25 billion cash, and Tap Rock for about $1.5 billion cash plus 13,538,472 new shares (valued at about $950 million), both subject to post-closing adjustments based on a July 1, 2023 effective date. The new shares are now issued and dilute existing holders, with a registration rights agreement requiring a resale registration statement. It also amended its credit facility (Fourth Amendment): maturity extended to August 2, 2028, borrowing base raised by $1.15 billion to $3.0 billion, elected commitments up by $850 million to $1.85 billion, and maximum credit amounts $4.0 billion. Financial statements and pro forma information for the acquired businesses are to be filed later.
Kimmeridge Energy Management Company, LLC reported a CIVITAS RESOURCES, INC. shareholding of 8,348,022 shares (10.40% of votes) in a periodic institutional filing.
On June 29, 2023 Civitas completed the offering of $1.35 billion of 8.375% senior notes due 2028 and $1.35 billion of 8.750% senior notes due 2031 (total $2.7 billion), to help pay for the Hibernia and Tap Rock acquisitions together with cash on hand and credit-facility borrowings. The notes must be partly or fully redeemed at 100% if the deals do not close by October 31, 2023 ($850M of each series if Hibernia fails, $600M of each if Tap Rock fails, all if neither closes). This adds substantial new debt with interest starting January 1, 2024; the filing text shown is truncated.
On June 23, 2023 Civitas amended its JPMorgan-led credit agreement (Third Amendment) so it can fund the Hibernia and Tap Rock deals signed June 19 with new notes, cash on hand, credit-facility borrowings, and up to $2.7 billion of 364-day bridge loans from Bank of America and JPMorgan. This answers the open question of how the cash would be paid for. The filing says that if the $1.35 billion + $1.35 billion notes offering (8.375% due 2028 and 8.750% due 2031) closes, expected June 29, the company does not expect to draw the bridge loans.
20 June 2023capital raising announcement● NeutralMajor
On June 19, 2023 Civitas signed two acquisition agreements: Hibernia Energy III for $2.25 billion cash, and Tap Rock Resources for $1.5 billion cash plus 13,538,472 new Civitas shares (valued at about $950 million). Each has a 7.5% cash deposit in escrow and is subject to closing conditions, and the Tap Rock sellers will get resale registration rights. The share issue would dilute existing holders, and this is a large new expansion; neither deal had closed per this filing, and the visible text does not say how the cash will be funded.
