May 1, 2017 Erin

Permian Resources Announces Consensual And Transformational Restructuring Transaction

OKLAHOMA CITY, May 1, 2017 /PRNewswire/ — Permian Resources, LLC (together with its subsidiaries, “Permian Resources” or the “Company”), today announced that it has entered into a series of definitive agreements with funds managed by affiliates of The Energy & Minerals Group (“EMG”), OnyxPoint Global Management LP (“OnyxPoint”), Sable Management, LLC (“Sable”) and other investors that provide for the purchase of $744 million at the closing of newly-issued common equity interests (the “Equity Financing”) of PRES New Equity LLC, a newly-created entity that will become an ultimate parent holding company of PRES Holdings, LLC (“PRES”).

In connection with the Equity Financing, funds affiliated with OnyxPoint have also agreed to exchange approximately $325 million of principal amount of the Company’s secured and unsecured indebtedness for equity interests (the “Senior Debt Exchange”) of PRES Initial Capital Aggregator, LLC, a newly-created entity that together with PRES New Equity, LLC will own 100% of the equity interests of PRES.  Concurrently with the Senior Debt Exchange, certain holders of the Exchangeable Junior Subordinated Notes issued by Permian Resources Holdings, LLC (the “Sub Notes”) have agreed to exchange approximately $249 million principal amount of the Sub Notes (including accrued and unpaid interest through the closing date) for equity interests of PRES Initial Capital Aggregator, LLC (together with the Senior Debt Exchange, the “Recapitalization”).  The Recapitalization is the result of a highly successful and consensual process that included all noteholders exchanging their notes agreeing to the Recapitalization.

Following the transactions, the Company will be re-named Sable Permian Resources LLC (“Sable Resources”).  Sable Resources will be led by industry veteran James C. Flores as Chief Executive Officer and Chairman of the Board. In connection with the Equity Financing and Recapitalization, the board of directors of PRES will be re-constituted to consist of three members to be appointed by EMG, three members to be appointed by OnyxPoint and one member to be appointed by management.

The Equity Financing provides the Company with $744 million of cash proceeds at the closing to execute a multi-year development plan, pursue leasehold acquisitions and satisfy general corporate purposes.  At the same time, the Recapitalization transactions eliminate approximately $574 million in principal amount of the Company’s indebtedness and are expected to reduce the Company’s interest expense by approximately $330 million over the life of the notes being retired.  The Equity Financing and Recapitalization transactions are scheduled to close concurrently on or about May 1st, 2017.  Following the Recapitalization transactions, EMG and OnyxPoint have received the option to purchase an additional $356 million of common equity interests in PRES New Equity LLC to support growth initiatives identified by management as well as other liquidity enhancing transactions.

Commenting on the transaction, Mr. Flores said, “With the Company’s outstanding Permian assets and my new partners EMG, OnyxPoint and my Sable Resources senior management team of Doss Bourgeois, Winston Talbert and John Wombwell, we plan to again drive strong returns for our new stakeholders. Our Sable Resources management team worked with me to build Plains Exploration & Production Company in 2001 from a $200 million enterprise to more than $15 billion market capitalization at the time of its 2013 sale, a more than nine times return on initial capital invested with strong execution in both operations and commercial transactions.”

John T. Raymond, founder and CEO of EMG added, “Post the consensual and highly successful restructuring of the balance sheet, we optimistically look to the future.  With the addition of significant liquidity and a proven, well known management team who has generated tremendous value in other resource plays, the company is now well positioned to generate significant equity value on behalf of all stakeholders.  We look forward to again working with Jim and his management team and the partnership we have created with OnyxPoint.”

“We are delighted to partner with EMG, Jim Flores and his team to effectuate this transformational recapitalization, which we believe creates a powerful platform for future growth,” noted Shaia D. Hosseinzadeh, Managing Partner of OnyxPoint.

About EMG

EMG is the management company for a series of specialized private equity funds. The firm was founded by John Raymond (majority owner and CEO) and John Calvert in 2006. EMG focuses on investing across various facets of the global natural resource industry including the upstream and midstream segments of the energy complex. EMG has approximately $16.2 billion of regulatory assets under management and approximately $10.4 billion in commitments have been allocated across the energy sector since inception.

About OnyxPoint

OnyxPoint is an alternative asset manager with a primary focus on investing in the energy sector. The firm seeks to partner with world class management teams to provide transformational capital to businesses with high quality assets. OnyxPoint takes an interdisciplinary approach by pursuing a broad range of transaction types including asset build-ups, corporate partnerships, financial restructurings and opportunistic buyouts. For more information about OnyxPoint, please contact:

About Permian Resources, LLC

Permian Resources, LLC, formerly American Energy – Permian Basin, LLC, is an independent oil and natural gas company focused on the acquisition, development and production of unconventional oil and natural gas reserves in the Wolfcamp Shale play in the central Midland Basin within the Permian Basin of West Texas.  For additional information, please visit

This press release is for informational purposes only and does not constitute an offer to buy or the solicitation of an offer to sell with respect to any securities.

Cautionary Statement Regarding Forward-Looking Statements

This document contains forward-looking statements. Forward-looking statements express views regarding future plans and expectations and include, but are not limited to, statements regarding future operations and operating costs, business strategy, future liquidity, future values of anticipated reserves and future production. These statements may include words such as “may,” “could,” “would,” “should,” “believe,” “expect,” “anticipate,” “plan,” “estimate,” “target,” “project,” “intend” and similar words or expressions, although not all forward-looking statements contain such identifying words.

Forward-looking statements are based on numerous assumptions and are subject to known and unknown risks and uncertainties, many of which are beyond our control. These risks include, but are not limited to, those risks related to our ability to: execute on our financial strategy and access the capital required for our development program; access the capital markets on terms acceptable to us or at all; navigate through general credit market and economic conditions; satisfy the covenants in our debt instruments and agreements; successfully transition acquired businesses and assets to the management and control of Permian Resources; execute on future drilling plans; hold our leasehold by production and convert reserves into production on an economic basis; manage rapid growth; realize attractive oil, NGL and natural gas prices or manage a prolonged period of low oil, natural gas and NGL prices; develop a successful marketing plan for the oil, NGLs and natural gas produced by Permian Resources; successfully identify and acquire additional productive leasehold; recruit and retain appropriately qualified personnel; effectively utilize technology; execute our drilling program; mitigate credit risk posed by significant customers; respond to intense competition in the onshore E&P industry; respond to shifting and increasing government regulatory requirements with respect to unconventional resource recovery, including hydraulic fracture stimulation; accurately predict the timing of infrastructure development (including long-haul pipelines) and tie-in of wells; accurately predict the timing and amount of future production of oil, NGLs and natural gas; access water, sourcing, distribution and disposal systems; generate sufficient cash flow to pay fixed charges; control our operating expenses and other costs; implement our hedging strategy and deliver expected results; avoid material legal or environmental liabilities; and manage inflation.

Actual future results may vary materially from those expressed or implied in these forward-looking statements, and Permian Resource’s business, financial condition and results of operations could be materially and adversely affected by numerous factors, including such known and unknown risks and uncertainties listed above.  As a result, forward-looking statements should be understood to be only predictions and statements of our current beliefs, and not as guarantees of performance. Any forward-looking statement speaks only as of the date on which it is made, and Permian Resources does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.


SOURCE Permian Resources, LLC

Related Links