Tulsa-based WPX Energy launched a $900 million public offering of senior unsecured notes this week in an effort to fulfill its obligation to pay off the cash end of the $2.5 billion purchase of a Permian Basin operator.
WPX stated in the announcement that it will deposit proceeds into an escrow account upon the closing and use the proceeds to finance part of the cash consideration of the company’s previously announced $2.5 billion acquisition of Felix Energy Holdings II, LLC.
WPX Energy made the acquisition in mid-December 2019 and described Felix Energy as one of the highest quality Delaware Basin operators.
Felix has approximately 1,500 gross undeveloped locations in the eastern portion of the basin, with expected production of approximately 60 MBoe/d (70% oil) at the time of anticipated closing. The purchase price consisted of $900 million cash and $1.6 billion in WPX stock issued to the seller.
WPX stated at the time that it intended to fund the $900 cash through issuance of $900 million in senior notes.
Barclays Capital Inc. and Citigroup Global Markets Inc. are acting as joint lead book-running managers for the offering.