Northern Oil and Gas, Inc. (NYSE American: NOG) (“Northern” or
the “Company”) today announced that it has commenced a private
offer to holders of its 8.50% Senior Secured Second Lien Notes due
2023 (the “Notes”), upon the terms and subject to the conditions
set forth in a Confidential Exchange and Tender Offer Statement and
Consent Solicitation Statement and Offering Memorandum (as it may
be supplemented and amended from time to time, the “Offering
Memorandum”), to participate, to the extent such holders are
eligible, in the options below at the election of such holders:
- Option 1: Offer to Eligible
Holders (as defined below) to exchange (the “Exchange Offer”) up to
$70,754,716 in principal amount of Notes validly tendered (and not
validly withdrawn) for newly issued 6.50% Perpetual Convertible
Preferred Stock (the “Preferred Stock”) having an aggregate
liquidation preference of $75,000,000. Eligible Holders that
validly tender (and do not validly withdraw) Notes in the Exchange
Offer will be entitled to have 10.27677% of such tendered Notes
accepted for exchange (the “Exchange Limit”) and will receive 10.60
shares of Preferred Stock per $1,000 in principal amount of Notes
accepted for exchange (the “Exchange Consideration”). Any Notes
validly tendered (and not validly withdrawn) in the Exchange Offer
that are not accepted for exchange due to application of the
Exchange Limit (the “Excess Exchange Notes”) will be deemed to be
tendered in the Tender Offer (as defined below) (such option,
“Option 1”). Eligible Holders that elect Option 1 will participate
in the Exchange Offer without participating in the Subscription
Offer (as defined below).
- Option 2: Offer to purchase for
cash (the “Tender Offer”) up to $200,000,000 in aggregate principal
amount of Notes (the “Tender Cap”) at a purchase price of $1,060
per $1,000 principal amount of Notes validly tendered (and not
validly withdrawn), including Excess Exchange Notes (the “Tender
Consideration”), subject to proration (such option, “Option
2”).
- Option 3: Solicitation of consents
(the “Consent Solicitation”) to (a) certain amendments (the
“Proposed Amendments”) to the indenture governing the Notes (as
amended and supplemented, the “Indenture”) and (b) certain
corresponding modifications to the Intercreditor Agreement, dated
as of May 15, 2019, between TPG Specialty Lending, Inc., as
Original Priority Lien Agent (as defined therein), and Wilmington
Trust, National Association, as Original Second Lien Agent (as
defined therein) and acknowledged and agreed to by the Company, and
offer to pay holders of Notes that validly deliver (and do not
validly revoke) consents to the Proposed Amendments (each such
consent, a “Consent”) at or prior to the Early Participation
Deadline (as defined below) a consent fee of $10 per $1,000
principal amount of Notes (the “Consent Fee”) for which a holder
validly delivers (and does not validly revoke) a Consent;
provided, that if an Eligible Holder
or a holder, as applicable, validly tenders (and does not validly
withdraw) Notes in the Exchange Offer or Tender Offer, such
Eligible Holder or holder, as applicable, shall be deemed to have
delivered Consents to the Proposed Amendments in respect of such
Notes, regardless of whether such Notes are accepted for exchange
or purchase, as applicable (such option, “Option 3”).
- Option 4: Offer to Eligible
Holders to participate in the Exchange Offer as described in Option
1 and to subscribe (the “Subscription Offer” and, together with the
Exchange Offer and the Tender Offer, the “Offers”) to purchase
additional shares of Preferred Stock having an aggregate
liquidation preference of $75,000,000 at a price of $1,000 for 10
shares. Each Eligible Holder participating in the Subscription
Offer will be required to purchase a number of shares equal to the
aggregate Exchange Consideration such Eligible Holder will receive
in the Exchange Offer. Any Excess Exchange Notes will be deemed to
be tendered in the Tender Offer (such option, “Option 4”).
The Exchange Offer and Subscription Offer are fully backstopped
by Angelo, Gordon, & Co., L.P. The Offers will expire at 11:59
p.m., New York City time, on November 18, 2019, unless extended
(such time and date, as the same may be extended, the “Expiration
Time”). To be eligible to receive the Consent Fee, holders of Notes
must validly tender (and not validly withdraw) their Notes or
validly deliver (and not validly revoke) their Consents at or prior
to 5:00 p.m., New York City time, on November 1, 2019, unless
extended (such time and date, as the same may be extended, the
“Early Participation Deadline”). Holders that validly tender their
Notes or deliver their Consents in the Consent Solicitation after
the Early Participation Deadline will not receive the Consent Fee
but will be eligible to receive the Exchange Consideration, subject
to the Exchange Limit, and/or the Tender Consideration, subject to
proration. Notes validly tendered may be withdrawn, and Consents
may be revoked, at any time prior to 5:00 p.m., New York City time,
on November 1, 2019, unless extended (such time and date, as the
same may be extended, the “Withdrawal Deadline”), but not
thereafter. The Offers are subject to the satisfaction or waiver of
the conditions set forth in the Offering Memorandum, including
receipt of Consents from holders of at least a majority in
aggregate principal amount of the Notes outstanding (the “Requisite
Consents”).
The Company will not register the Exchange Offer, the
Subscription Offer or the issuance of the Preferred Stock under the
Securities Act of 1933, as amended (the “Securities Act”), or any
other securities laws. Only holders of Notes that represent that
they are either a “qualified institutional buyer,” as that term is
defined in Rule 144A under the Securities Act, or a person that is
not a “U.S. person” and is participating in the Exchange Offer or
Subscription Offer in compliance with Regulation S under the
Securities Act, are authorized to participate in the Exchange Offer
and Subscription Offer. The Company refers to the holders of Notes
that represent that they are eligible to participate in the
Exchange Offer and Subscription Offer pursuant to at least one of
the foregoing conditions as “Eligible Holders.”
EXCHANGE OFFER
The Exchange Consideration payable for Notes validly tendered
pursuant to Option 1 (and not validly withdrawn) and accepted for
exchange after application of the Exchange Limit is set forth in
the table below. Eligible Holders of Notes validly tendered
pursuant to Option 1 (and not validly withdrawn) at or prior to the
Early Participation Deadline will also be deemed to have delivered
Consents and be eligible to receive the Consent Fee in respect of
all such Notes without any reduction due to the Exchange Limit.
Eligible Holders of Notes validly tendered pursuant to Option 1
(and not validly withdrawn) after the Early Participation Deadline
and at or prior to the Expiration Time will not be eligible to
receive the Consent Fee in respect of such Notes, but will be
eligible to receive the Exchange Consideration in respect of all
Notes accepted for purchase after application of the Exchange
Limit. Eligible Holders of Notes accepted for exchange will also
receive a cash payment of accrued and unpaid interest on such Notes
from the last interest payment date preceding the Settlement Date
(as defined below) to, but not including, the Settlement Date
(“Accrued Interest”).
Exchange Limit
Exchange
Consideration(1)
Consent Fee(2)
10.27677% of Notes validly
tendered and not validly withdrawn
10.60 shares of Preferred Stock
with a liquidation preference of $100 per share of Preferred
Stock
$10
(1)
Per $1,000 principal amount of Notes
validly tendered (and not validly withdrawn) and accepted for
exchange after application of the Exchange Limit.
(2)
Per $1,000 principal amount of Notes for
which Consents are validly delivered (and not validly revoked) at
or prior to the Early Participation Deadline.
Eligible Holders that validly tender (and do not validly
withdraw) Notes in the Exchange Offer will be entitled to have
10.27677% of such tendered Notes accepted for exchange, without
regard to the total principal amount of Notes tendered by all
Eligible Holders in the Exchange Offer. Any Excess Exchange Notes
will be deemed to be tendered in the Tender Offer (and not validly
withdrawn) and may be accepted for purchase in the Tender Offer,
subject to proration.
The Company will settle the Offers promptly after the Expiration
Time, which the Company expects to be the third business day after
the Expiration Time (the “Settlement Date”). Unless required by
applicable law, tendered Notes may not be withdrawn after the
Withdrawal Deadline. The Company may extend the Early Participation
Deadline or the Expiration Time without extending the Withdrawal
Deadline, unless otherwise required by law.
TENDER OFFER
The Tender Consideration payable for Notes validly tendered
pursuant to Option 2 (and not validly withdrawn) that are accepted
for purchase, including Excess Exchange Notes, is set forth in the
table below. Holders of Notes validly tendered pursuant to Option 2
(and not validly withdrawn) at or prior to the Early Participation
Deadline will be deemed to have delivered Consents and be eligible
to receive the Consent Fee in respect of all such Notes regardless
of whether such Notes are accepted for purchase. Holders of Notes
validly tendered pursuant to Option 2 (and not validly withdrawn),
including Excess Exchange Notes, after the Early Participation
Deadline and at or prior to the Expiration Time will not be
eligible to receive the Consent Fee in respect of such Notes, but
will be eligible to receive the Tender Consideration in respect of
all Notes accepted for purchase. Holders of Notes accepted for
purchase will also receive Accrued Interest.
Tender Cap
Tender
Consideration(1)
Consent Fee(2)
$200,000,000
$1,060
$10
(1)
Per $1,000 principal amount of Notes
validly tendered pursuant to Option 2 (and not validly withdrawn),
including Excess Exchange Notes, that are accepted for
purchase.
(2)
Per $1,000 principal amount of Notes
validly tendered pursuant to Option 2 (and not validly withdrawn),
including Excess Exchange Notes, at or prior to the Early
Participation Deadline.
If, at the Expiration Time, the aggregate principal amount of
Notes validly tendered pursuant to Option 2 (and not validly
withdrawn), including Excess Exchange Notes, exceeds the Tender
Cap, then acceptance of such Notes for purchase will be subject to
proration.
The Company will settle the Tender Offer on the Settlement Date.
Unless required by applicable law, tendered Notes may not be
withdrawn after the Withdrawal Deadline. The Company may extend the
Early Participation Deadline or the Expiration Time without
extending the Withdrawal Deadline, unless otherwise required by
law.
SUBSCRIPTION OFFER
In addition, subject to the terms and conditions set forth in
the Offering Memorandum, we are offering Eligible Holders that
participate in the Exchange Offer the opportunity to subscribe to
purchase additional shares of Preferred Stock having an aggregate
liquidation preference of $75,000,000 at a price of $1,000 for 10
shares. Each Eligible Holder that participates in the Subscription
Offer will be required to purchase a number of shares equal to the
Exchange Consideration such Eligible Holder will receive in the
Exchange Offer. The Subscription Offer expires at the Expiration
Time.
PREFERRED STOCK
Holders of Preferred Stock will be entitled to receive, when, as
and if declared by the Company’s board of directors, cumulative
dividends at a rate per annum of 6.5% on the sum of (i) the
liquidation preference of $100 per share of Preferred Stock plus
(ii) all accumulated and unpaid dividends on such share, whether or
not declared. Declared dividends will be payable solely in cash.
Electing holders may convert any or all of their shares of
Preferred Stock at any time based on an initial conversion rate of
43.63 shares of the Company’s common stock per share of Preferred
Stock, subject to adjustment as described in the Offering
Memorandum. The Company will be subject to certain restrictions on
paying dividends on or acquiring junior stock unless all
accumulated and unpaid dividends for all preceding dividend periods
have been paid, as described in the Offering Memorandum. The
Preferred Stock is subject to mandatory conversion at the Company’s
option under the circumstances and subject to the conditions
described in the Offering Memorandum, but is not redeemable by
either the Company or the holders. Holders are entitled to
additional amounts upon conversion in connection with a
“fundamental change” as described in the Offering Memorandum. The
holders of Preferred Stock will not have voting rights other than
limited voting rights described in the Offering Memorandum.
CONSENT SOLICITATION
The Company is also soliciting Consents from all holders of
Notes to the Proposed Amendments. Subject to the terms and
conditions set forth in the Offering Memorandum, each holder that
validly delivers (and does not validly revoke) Consents at or prior
to the Early Participation Deadline, including holders that are
deemed to have delivered Consents by timely electing Option 1,
Option 2, or Option 4 will receive the Consent Fee in respect of
all Notes for which it has delivered a Consent, regardless of
whether such Notes are accepted for exchange or purchase, as
applicable.
The Offers are conditioned, among other things, upon the receipt
of Consents from holders of at least a majority in aggregate
principal amount of the Notes outstanding (less any Notes held by
the Company or its affiliates). Holders may not tender their Notes
without delivering Consents; however, holders may elect to
participate only in Consent Solicitation, and receive the Consent
Fee, without participating in the Exchange Offer or Tender
Offer.
BACKSTOP AGREEMENT
Pursuant to the terms of a Backstop Agreement, dated as of
October 21, 2019, by and among the Company and certain affiliates
of Angelo, Gordon & Co, L.P., that hold in aggregate
approximately 12.5% of the outstanding Notes (collectively, the
“Backstop Party,” and such agreement, the “Backstop Agreement”),
the Backstop Party has agreed, subject to the terms and conditions
set forth therein to (i) tender (and not withdraw) all Notes held
by the Backstop Party in the Exchange Offer (and, accordingly,
Consent in respect of all such Notes and tender its Excess Exchange
Notes in the Tender Offer) and (ii) exchange additional Notes for
and/or purchase all shares of Preferred Stock offered for exchange
or purchase pursuant to the Exchange Offer and the Subscription
Offer, respectively, but not issued pursuant to the terms of the
Exchange Offer or the Subscription Offer.
AVAILABLE DOCUMENTS AND OTHER DETAILS
D.F. King & Co., Inc. (“DF King”) is the Exchange and Tender
Agent for the Exchange Offer and Tender Offer and the Information
Agent for the Consent Solicitation. Holders may obtain copies of
the Offering Memorandum from DF King by telephone at (800) 967-4617
or by email at NOG@dfking.com.
The complete terms and conditions of the Offers are set forth in
the Offering Memorandum. This announcement is for informational
purposes only and is not an offer to purchase, or the solicitation
of an offer to sell, the Notes or the Preferred Stock. The Exchange
Offer, Tender Offer, Subscription Offer and Consent Solicitation
may only be made pursuant to the terms of the Offering Memorandum.
The Offers are not being made, and Consents are not being
solicited, in any jurisdiction in which the making or acceptance
thereof would not be in compliance with the securities, blue sky or
other laws of such jurisdictions.
ABOUT NORTHERN OIL AND GAS
Northern Oil and Gas, Inc. is an exploration and production
company with a core area of focus in the Williston Basin Bakken and
Three Forks play in North Dakota and Montana.
SAFE HARBOR
This press release contains forward-looking statements regarding
future events and future results that are subject to the safe
harbors created under the Securities Act of 1933, as amended, and
the Securities Exchange Act of 1934, as amended. All statements
other than statements of historical facts included in this release
regarding Northern’s financial position, business strategy, plans
and objectives of management for future operations, industry
conditions, and indebtedness covenant compliance are
forward-looking statements. When used in this release,
forward-looking statements are generally accompanied by terms or
phrases such as “estimate,” “project,” “predict,” “believe,”
“expect,” “continue,” “anticipate,” “target,” “could,” “plan,”
“intend,” “seek,” “goal,” “will,” “should,” “may” or other words
and similar expressions that convey the uncertainty of future
events or outcomes. Items contemplating or making assumptions about
actual or potential future sales, market size, collaborations, and
trends or operating results also constitute such forward-looking
statements.
Forward-looking statements involve inherent risks and
uncertainties, and important factors (many of which are beyond
Northern’s control) that could cause actual results to differ
materially from those set forth in the forward-looking statements,
including the following: Northern’s ability to complete the
transactions described in this press release, changes in crude oil
and natural gas prices, the pace of drilling and completions
activity on Northern’s properties, Northern’s ability to acquire
additional development opportunities, changes in Northern’s
reserves estimates or the value thereof, general economic or
industry conditions, nationally and/or in the communities in which
Northern conducts business, changes in the interest rate
environment, legislation or regulatory requirements, conditions of
the securities markets, Northern’s ability to raise or access
capital, changes in accounting principles, policies or guidelines,
financial or political instability, acts of war or terrorism, and
other economic, competitive, governmental, regulatory and technical
factors affecting Northern’s operations, products, services and
prices.
Northern has based these forward-looking statements on its
current expectations and assumptions about future events. While
management considers these expectations and assumptions to be
reasonable, they are inherently subject to significant business,
economic, competitive, regulatory and other risks, contingencies
and uncertainties, most of which are difficult to predict and many
of which are beyond Northern’s control. These and other applicable
risks and uncertainties have been described more fully in
Northern’s Annual Report on Form 10-K filed with the SEC on March
18, 2019 and in Northern’s subsequent SEC filings. Northern does
not undertake any duty to update or revise any forward-looking
statements, except as may be required by the federal securities
laws.
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version on businesswire.com: https://www.businesswire.com/news/home/20191021005896/en/
Nicholas O’Grady 952-476-9800 ir@northernoil.com
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