Each one in plain English, with the numbers worked through for a shareholder.
17 Aug 2015asset acquisition disposition▲ GoodMajor
WPX closed the RKI acquisition on August 17, 2015, completing the deal announced on July 13. Each RKI unit converted into 6.02382876 unregistered WPX shares, $151.4969094 in cash, and one share of NewWoods Holdings, LLC, plus any escrow payouts. Holders who were not accredited investors got $365.21633 in cash per unit instead. The press release describes the Permian Delaware Basin assets as roughly 22,000 boe/d of production and about 92,000 net acres. It also describes a target of $800 million to $1 billion of divestitures by year-end 2016. The new shares dilute existing holders. The 40,000,000 share figure is from the merger terms, not this filing. Pro forma financials are to follow by amendment.
On July 31, 2015, WPX raised the total commitments under its revolving credit agreement (dated Oct 28, 2014, Wells Fargo as administrative agent) from $1.5 billion to $1.75 billion. It used $250 million of the $300 million increase it was entitled to request. The filing does not say what the extra capacity is for. (Inference: the timing, between the RKI signing and closing, may be related, but the filing does not say so.)
This amendment repeats the July 14 8-K on the RKI merger. Per its explanatory note, it was filed to add the Item 3.02 disclosure on unregistered share issuance. The Item 3.02 text is cut off in the material shown, so no new figures can be stated. The RKI deal terms are unchanged.
This is the full 8-K for the RKI deal first flagged on July 14. WPX agreed on July 13, 2015 to buy RKI Exploration & Production through a merger. RKI holders get 40,000,000 unregistered WPX shares (valued at $11.729 each) plus cash, so the total is set around $2.75 billion before adjustments. They also get either cash or interests in a new subsidiary holding certain Powder River Basin assets, depending on whether those assets are sold first. $137.5 million is held in escrow. The deal needs antitrust clearance and other conditions, and either side can walk away if it has not closed by Nov 30, 2015. A $82.5 million fee applies in some cases, including if WPX fails to obtain financing. WPX also has a commitment letter with Barclays for a bridge facility; its size is cut off in the text shown. This resolves the earlier gap on price and terms.
WPX disclosed that on July 13, 2015 it agreed to acquire RKI Exploration & Production, LLC through a merger, with RKI becoming a wholly owned subsidiary. The filing itself only supplies RKI's financial statements, pro forma combined figures and reserve reports; it states no price or terms in the text shown. RKI's audited 2014 figures show revenue of about $727 million and net income of about $170 million, including a $129.6 million gain on asset sales. The pro forma statements also reflect RKI's probable asset sales and related financing offerings.
