WPX Energy (NYSE:WPX) announced today that it has commenced cash tender offers (the “Tender Offers”) to purchase up to $500,000,000 aggregate purchase price (as it may be increased by WPX, the “Aggregate Maximum Tender Amount”) of its outstanding 8.25 percent Senior Notes due 2023 (the “2023 Notes”), 6.000 percent Senior Notes due 2022 (the “2022 Notes”) and 5.25 percent Senior Notes due 2024 (the “2024 Notes” and, together with the 2023 and the 2022 Notes, the “Notes”).
The Company will only accept for purchase its 2024 Notes having an aggregate purchase price (exclusive of Accrued Interest (as defined below)) of up to $50,000,000 (such aggregate purchase price, subject to increase or decrease by the Company, the "2024 Notes Tender Cap").
The Company is also soliciting (1) from the holders of the Company’s 2023 Notes, consents (the “2023 Notes Consents”) to a proposed amendment to the Indenture, dated as of September 8, 2014, between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”), as supplemented in respect of the 2023 Notes by the Second Supplemental Indenture, dated as of July 22, 2015 (as so supplemented, the “2023 Notes Indenture”) and (2) from the holders of the Company’s 2022 Notes, consents (the “2022 Notes Consents” and together with the 2023 Notes Consents, the “Consents”) to a proposed amendment to the Indenture, dated as of November 14, 2011, between the Company and the Trustee (the “2022 Notes Indenture” and together with the 2023 Notes Indenture, an “Indenture” and, collectively, the “Indentures”), in each case to amend the applicable Indentures as described herein to, among other things, eliminate substantially all of the restrictive covenants and certain events of default under the Indentures with respect to the applicable series of Notes and reduce the minimum notice period required for redemptions of the applicable series of Notes from 30 days as currently required by the applicable Indenture to 3 business days (the “Proposed Amendments”) and to the execution and delivery of supplemental indenture to the applicable Indenture in order to effect the applicable Proposed Amendment. We refer to the solicitations of Consents as the “Consent Solicitations.”
The terms and conditions of the Tender Offers and Consent Solicitations are described in an Offer to Purchase and Consent Solicitation Statement, dated June 3, 2020 (the “Offer to Purchase and Consent Solicitation”). WPX intends to fund the Tender Offers with the net proceeds of its proposed offering of debt securities (the “Debt Financing”) together with, if necessary, any other sources of available funds.
The following table sets forth certain terms of the Tender Offers:
| | | | Dollars per $1,000 Principal Amount of Notes |
| Title of Notes | CUSIP Number(s) / ISIN | Aggregate Principal Amount Outstanding(1) | | Tender Cap | | Acceptance Priority Level | | Tender Offer Consideration(2) | | Early Tender Premium | | Total Consideration (2)(3) |
| 8.25% Senior Notes due 2023 | 98212BAG8 US98212BAG86 | $405,547,000 | | N/A | | 1 | | $1,070.00 | | $50.00 | | $1,120.00 |
| | | | | | | | | | | | | |
| 6.000% Senior Notes due 2022 | 98212BAD5 98212BAB9 US98212BAD55 US98212BAB99 U46031AB3 | $73,199,000 | | N/A | | 2 | | $975.00 | | $50.00 | | $1,025.00 |
| | | | | | | | | | | | | |
| 5.25% Senior Notes due 2024 | 98212BAE3 US98212BAE39 | $647,230,000 | | $50,000,000 | | 3 | | $958.75 | | $50.00 | | $1,008.75 |
| | | | | | | | | | | | | |
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- As of the date of the Offer to Purchase.
- Per $1,000 principal amount of Notes validly tendered and accepted for purchase.
- Includes the Early Tender Premium.
The Tender Offers and Consent Solicitations will expire at midnight, New York City time, at the end of June 30, 2020, unless extended or earlier terminated by WPX (the “Expiration Date”). No tenders or Consents submitted after the Expiration Date will be valid.
Holders of Notes that are validly tendered (and not validly withdrawn) at or prior to 5 p.m., New York City time, on June 16, 2020 (such date and time, as it may be extended, the “Early Tender Date”) and accepted for purchase pursuant to the Tender Offers will receive the applicable Total Consideration for such series, which includes the early tender premium for such series of Notes set forth in the table above (with respect to each series of Notes, the “Early Tender Premium”). Holders of Notes tendering their Notes after the Early Tender Date will only be eligible to receive the applicable tender offer consideration for such series of Notes set forth in the table above, which is the applicable Total Consideration less the Early Tender Premium.
All Notes validly tendered and accepted for purchase pursuant to the Tender Offers will receive the applicable consideration set forth in the table above, plus accrued and unpaid interest on such Notes from the applicable last interest payment date with respect to those Notes to, but not including, the applicable Settlement Date (as defined below) (“Accrued Interest”).
Any Holder who tenders 2023 Notes or 2022 Notes pursuant to the applicable Offer must also deliver a Consent pursuant to the related Consent Solicitation. A Consent may not be delivered separately and can only be delivered with the tender of 2023 Notes or 2022 Notes, as applicable. A Consent provided in connection with a tender of 2023 Notes or 2022 notes, as applicable, cannot be revoked without a proper withdrawal of the related tendered Notes. A valid withdrawal of 2023 Notes or 2022 Notes, as applicable, will constitute the concurrent valid revocation of such holder’s related Consent.
Tendered Notes may be withdrawn (and the related Consents, to the extent applicable, may be revoked) at or prior to 5 p.m., New York City time, on June 16, 2020, unless extended by WPX (such date and time, as it may be extended, the “Withdrawal Date”). Holders of Notes who tender their Notes (and, to the extent applicable, deliver their Consents) after the Withdrawal Date, but prior to the Expiration Date, may not withdraw their tendered Notes (or, to the extent applicable, revoke their Consents) unless withdrawal or revocation rights are otherwise required by applicable law.
Provided that the conditions to the applicable Tender Offer have been satisfied or waived, and assuming acceptance for purchase by the Company of Notes validly tendered pursuant to the Tender Offers, (i) payment for applicable Notes validly tendered at or prior to the applicable Early Tender Date and purchased in the applicable Tender Offer shall be made on the settlement date that is expected to be the business day following the applicable Early Tender Date, or as promptly as practicable thereafter (with respect to each series of Notes, the “Early Settlement Date”) and (ii) payment for any applicable Notes validly tendered after the applicable Early Tender Date, but at or prior to the applicable Expiration Date, and purchased in the applicable Tender Offer shall be made on the settlement date that is expected to be the second business day following the applicable Expiration Date, or as promptly as practicable thereafter (with respect to each series of Notes, the “Final Settlement Date” and, together with the related Early Settlement Date, the “Settlement Dates”).
Subject to the Aggregate Maximum Tender Amount, the 2024 Notes Tender Cap and proration, the Notes accepted on any Settlement Date will be accepted in accordance with their Acceptance Priority Levels set forth in the table above, with 1 being the highest Acceptance Priority Level and 3 being the lowest Acceptance Priority Level, and provided further that Notes tendered at or prior to the Early Tender Date will be accepted for purchase with priority over Notes tendered after the Early Tender Date, but at or prior to the Expiration Date, regardless of the priority of the series of such later tendered Notes. In addition, no more than $50,000,000 aggregate purchase price (exclusive of Accrued Interest) of the 2024 Notes will be purchased in the Tender Offers (as it may be increased by WPX, the “2024 Notes Tender Cap”).
Acceptance for tenders of any Notes may be subject to proration if the aggregate purchase price (exclusive of Accrued Interest) for any series of Notes validly tendered and not validly withdrawn would cause the Aggregate Maximum Tender Amount to be exceeded. Acceptance for tenders of the 2024 Notes may also be subject to proration if the aggregate purchase price (exclusive of Accrued Interest) of the specified series of 2024 Notes validly tendered and not validly withdrawn is greater than the 2024 Notes Tender Cap. Furthermore, if the Tender Offers are fully subscribed as of the Early Tender Date, holders who validly tender Notes after the Early Tender Date will not have any of their Notes accepted for purchase and there will be no Final Settlement Date.
The Company reserves the right, but is under no obligation, to increase the Aggregate Maximum Tender Amount and/or the 2024 Notes Tender Cap at any time, subject to compliance with applicable law, which could result in the Company purchasing a greater aggregate purchase price (exclusive of Accrued Interest) of Notes in the Tender Offers. There can be no assurance that the company will increase the Aggregate Maximum Tender Amount or the 2024 Notes Tender Cap. If the Company increases the Aggregate Maximum Tender Amount and/or the 2024 Notes Tender Cap, it does not expect to extend the Withdrawal Date, subject to applicable law. Accordingly, Holders should not tender Notes that they do not wish to have purchased in the Tender Offers.
The consummation of the Tender Offers is not conditioned upon any minimum amount of Notes being tendered or upon obtaining any Consent. However, the Tender Offers are subject to, and conditioned upon, the satisfaction or waiver of certain conditions described in the Offer to Purchase, including the completion of the Debt Financing. The adoption of the Proposed Amendments with respect to the 2023 Notes Indenture and the 2022 Notes Indenture and related series of Notes is conditioned upon obtaining the requisite Consent with respect to the applicable Indenture or related series of Notes but is not conditioned upon the consummation of the other Consent Solicitation or adoption of the applicable Proposed Amendment in respect of the other Indenture and related series of Notes or obtaining any requisite Consent with respect to the other Indenture or related series of Notes.
This press release is neither an offer to purchase nor a solicitation of an offer to sell securities. No offer, solicitation, purchase or sale will be made in any jurisdiction in which such offer, solicitation, or sale would be unlawful. The offer is being made solely pursuant to terms and conditions set forth in the Offer to Purchase. Nothing contained herein shall constitute an offer of the debt securities that are subject of the Debt Financing.
The lead dealer manager for the Tender Offers and solicitation agent for the Consent Solicitations is Wells Fargo Securities, LLC (the “Lead Dealer Manager”), and the co-dealer manager for the Tender Offers and co-solicitation agent for the Consent Solicitations is MUFG Securities Americas Inc. (the “Co-Dealer Manager, and together with the Lead Dealer Manager, the “Dealer Managers”). Any questions regarding the terms of the Tender Offers and Consent Solicitations should be directed to the Dealer Managers at Wells Fargo Securities, LLC at (toll-free) 866-309-6316 or (collect) 704-410-4756 or MUFG Securities Americas Inc. at (toll-free) 877-744-4532. Any questions regarding procedures for tendering Notes should be directed to the Information Agent for the Tender Offers, Global Bondholder Services Corporation, toll-free at (866) 794-2200 (banks and brokers call (212) 430-3774) or 65 Broadway, Suite 404, New York, NY 10006.
Copies of the Offer to Purchase and Consent Solicitation are available from the Information Agent and at the following web address: http://www.gbsc-usa.com/WPX/.
About WPX Energy, Inc.
WPX is an independent energy producer with core positions in the Permian and Williston basins. WPX’s production is approximately 80 percent oil/liquids and 20 percent natural gas. The Company also has an infrastructure portfolio in the Permian Basin.
This press release includes “forward-looking statements.” All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company. Investors are cautioned that any such statements are not guarantees of future performance and that actual results or developments may differ materially from those projected in the forward-looking statements. The forward-looking statements in this press release are made as of the date of this press release, even if subsequently made available by WPX Energy on its website or otherwise. WPX Energy does not undertake and expressly disclaims any obligation to update the forward-looking statements as a result of new information, future events or otherwise. Investors are urged to consider carefully the disclosure in our filings with the Securities and Exchange Commission, available from us at WPX Energy, Attn: Investor Relations, P.O. Box 21810, Tulsa, Okla., 74102, or from the SEC’s website at www.sec.gov.
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