Item 1.01 Entry into a Material Definitive Agreement.
New Mexico Acquisition
On April 3, 2023 (the “Closing Date”), Riley Exploration - Permian, LLC. (“REP LLC”), a wholly-owned subsidiary of Riley Exploration Permian, Inc. (“REPX,” together with REP LLC, hereinafter referred to as the “Company”), completed its previously announced acquisition of oil and natural gas assets (the “New Mexico Acquisition”) from Pecos Oil & Gas, LLC (“Pecos”), a Delaware limited liability company and an affiliate of Cibolo Energy Partners LLC.
The aggregate purchase price of the New Mexico Acquisition is $330 million, subject to customary purchase price adjustments pursuant to the purchase and sale agreement (the “Purchase Agreement”), and was funded through a combination of borrowings under the Company's revolving credit facility and proceeds from the issuance of $200 million of unsecured senior notes.
The foregoing description of the Purchase Agreement contained herein does not purport to be complete and is qualified in its entirety by reference to the Purchase Agreement, which is attached hereto as Exhibit 2.1 and is incorporated herein by reference.
10.50% Senior Unsecured Notes due 2028
On the Closing Date, the Company (as “Issuer”) completed its issuance of $200 million aggregate principal amount of 10.50% Senior Unsecured Notes due 2028 (the “Senior Notes”) pursuant to a note purchase agreement (the “Note Purchase Agreement”), which the Senior Notes were issued at a 6% discount. The net proceeds from the Senior Notes were used to fund a portion of the purchase price and related fees, costs and expenses for the New Mexico Acquisition.
The Issuer may, at its option, redeem, at any time and from time to time on or prior to April 3, 2026, some or all of the Senior Notes at 100% of the principal amount thereof plus the make-whole amount plus a premium of 5.25% as set forth in the Note Purchase Agreement plus accrued and unpaid interest, if any. After April 3, 2026, but on or prior to October 3, 2026, the Issuer may, at its option, redeem, at any time and from time to time some or all of the Senior Notes at 100% of the principal amount thereof plus a premium of 5.25% as set forth in the Note Purchase Agreement plus accrued and unpaid interest, if any. After October 3, 2026, the Issuer may redeem some or all of the Senior Notes at 100% of the principal amount thereof plus accrued and unpaid interest, if any. The principal remaining outstanding at the time of maturity is required to be paid in full by the Issuer.
The Note Purchase Agreement contains customary terms and covenants, including limitations on the Company’s ability to incur additional secured and unsecured indebtedness.
The foregoing description of the Note Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Note Purchase Agreement, a copy of which is attached as Exhibit 4.1 hereto and incorporated herein by reference.
Amendment to Credit Agreement
On the Closing Date, the Company entered into the fourteenth amendment (the “Fourteenth Amendment”) to the credit facility dated September 28, 2017 (the “Credit Facility”) with Truist Bank, as Administrative Agent, and the lenders party thereto. The Fourteenth Amendment to the Credit Facility increased the maximum facility amount to $1.0 billion and increased the borrowing base to $325 million. The Company used borrowings from the Credit Facility to fund the remainder of the purchase price and related fees, costs and expenses for the New Mexico Acquisition.
The foregoing description of the Fourteenth Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Amendment, a copy of which is attached as Exhibit 10.1 hereto and incorporated herein by reference.