Diamondback Energy, Inc. (NASDAQ: FANG) (“Diamondback”) and Rattler
Midstream LP (NASDAQ: RTLR) (“Rattler”) today announced that, on
May 15, 2022, they entered into a definitive agreement for
Diamondback to acquire all of the publicly held common units
representing the limited partner interests in Rattler not already
owned by Diamondback and its subsidiaries. The agreement provides
for an all-stock transaction whereby each public unitholder of
Rattler would receive 0.113 of a share of common stock in
Diamondback in exchange for each Rattler common unit owned, an
exchange ratio that implies a premium of 17.3% for Rattler common
units based on the closing prices of Rattler’s common units and
Diamondback’s common stock as of May 13, 2022, and a premium of
9.3% based on Rattler’s and Diamondback’s 30 day volume-weighted
average trading price as of the same date.
“The energy landscape has transformed
dramatically since Rattler was taken public in 2019, and we believe
this agreement to merge companies is in the best interests of both
Diamondback and Rattler stakeholders,” stated Travis Stice, Chief
Executive Officer of Diamondback and of the general partner of
Rattler. “This merger will allow both companies to benefit from the
simplicity and scale of the combined entity going forward.”
The Conflicts Committee of the board of
directors of Rattler’s general partner, composed of independent
directors, unanimously approved the merger agreement after
consultation with its independent legal and financial advisors. The
merger agreement was subsequently unanimously approved by the board
of directors of Rattler’s general partner. Diamondback E&P LLC,
a wholly owned subsidiary of Diamondback and the holder of a
majority of the outstanding units of Rattler, has voted its units
to approve the transaction. The transaction is expected to close in
the third quarter of 2022, subject to customary closing
conditions.
Advisors
J.P. Morgan Securities LLC is acting as
financial advisor and Akin Gump Strauss Hauer & Feld LLP is
acting as legal advisor to Diamondback. Evercore is acting as
financial advisor and Gibson, Dunn & Crutcher LLP is acting as
legal advisor to the Conflicts Committee of the board of directors
of Rattler’s general partner.
About Diamondback Energy, Inc.
Diamondback is an independent oil and natural
gas company headquartered in Midland, Texas focused on the
acquisition, development, exploration and exploitation of
unconventional, onshore oil and natural gas reserves in the Permian
Basin in West Texas. For more information, please visit
www.diamondbackenergy.com.
About Rattler Midstream LP
Rattler Midstream LP is a Delaware limited
partnership formed by Diamondback Energy to own, operate, develop
and acquire midstream and energy-related infrastructure assets.
Rattler owns crude oil, natural gas and water-related midstream
assets in the Permian Basin that provide services to Diamondback
Energy and third party customers under primarily long-term,
fixed-fee contracts. For more information, please visit
www.rattlermidstream.com.
Important Information for Investors; Additional
Information and Where to Find It
This communication does not constitute an offer
to sell or the solicitation of an offer to buy any securities or a
solicitation of any vote or approval, nor shall there be any sale,
issuance, exchange or transfer of the securities referred to in
this document in any jurisdiction in contravention of applicable
law. In connection with the proposed transaction, Diamondback
intends to file with the Securities and Exchange Commission (the
“SEC”) a registration statement on Form S-4 that will include an
information statement that also constitutes a prospectus of
Diamondback. Each of Diamondback and Rattler also plans to file
other relevant documents with the SEC regarding the proposed
transaction. No offering of securities shall be made except by
means of a prospectus meeting the requirements of Section 10 of the
U.S. Securities Act of 1933, as amended.
INVESTORS AND SECURITY HOLDERS OF DIAMONDBACK
AND RATTLER ARE URGED TO READ THE REGISTRATION STATEMENT,
INFORMATION STATEMENT/PROSPECTUS AND OTHER DOCUMENTS THAT MAY BE
FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY IF AND WHEN THEY
BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION
ABOUT THE PROPOSED TRANSACTION.
Investors and security holders will be able to
obtain free copies of these documents (if and when available) and
other documents containing important information about Diamondback
and Rattler, once such documents are filed with the SEC through the
website maintained by the SEC at http://www.sec.gov. Copies of the
documents filed with the SEC by Diamondback will be available free
of charge on Diamondback’s website at
https://www.diamondbackenergy.com under the tab “Investors” and
then under the heading “Financial Information.” Copies of the
documents filed with the SEC by Rattler will be available free of
charge on Rattler’s website at https://www.rattlermidstream.com/
under the tab “Investors” and then under the heading “Financial
Information.”
Participants in the Solicitation
Diamondback, Rattler and certain of their
respective directors, executive officers and other persons may be
deemed to be participants in the solicitation of proxies and
consents in respect of the proposed transaction. Information
regarding the directors and executive officers of Diamondback is
available in its definitive proxy statement for its 2021 annual
meeting, filed with the SEC on April 23, 2021, and in Diamondback’s
annual report on Form 10-K for the fiscal year ended December 31,
2021, filed with the SEC on February 24, 2022. Information
regarding the directors and executive officers of Rattler is
available in Rattler’s annual report on Form 10-K for the fiscal
year ended December 31, 2021 filed with the SEC on February 24,
2022. Other information regarding the participants in the
solicitations and a description of their direct and indirect
interests, by security holdings or otherwise, will be contained in
the information statement/prospectus and other relevant materials
to be filed with the SEC when such materials become available.
Investors should read the information statement/prospectus
carefully when it becomes available before making any investment
decisions. You may obtain free copies of these documents from
Diamondback or Rattler using the sources indicated above.
Forward-Looking Statements
This news release contains “forward-looking
statements” within the meaning of Section 27A of the Securities Act
and Section 21E of the Exchange Act, which involve risks,
uncertainties, and assumptions. All statements, other than
statements of historical fact, including statements regarding
Diamondback’s and Rattler’s: future performance; business strategy;
future operations; estimates and projections of revenues, losses,
costs, expenses, returns, cash flow, and financial position;
anticipated benefits of strategic transactions (including
acquisitions and divestitures); and plans and objectives of
management (including plans for future cash flow from operations)
are forward-looking statements. These statements also include, but
are not limited to, statements regarding: the expected benefits of
the proposed transaction to Diamondback and Rattler and their
shareholders and unitholders, respectively, the anticipated
completion of the proposed transaction and the timing thereof. When
used in this news release, the words “aim,” “anticipate,”
“believe,” “continue,” “could,” “estimate,” “expect,” “forecast,”
“future,” “guidance,” “intend,” “may,” “model,” “outlook,” “plan,”
“positioned,” “potential,” “predict,” “project,” “seek,” “should,”
“target,” “will,” “would,” and similar expressions (including the
negative of such terms) as they relate to Diamondback and Rattler
are intended to identify forward-looking statements, although not
all forward-looking statements contain such identifying words.
Although Diamondback and Rattler each believes that the
expectations and assumptions reflected in its forward-looking
statements are reasonable as and when made, they involve risks and
uncertainties that are difficult to predict and, in many cases,
beyond Diamondback’s and Rattler’s control. Accordingly,
forward-looking statements are not guarantees of future performance
and Diamondback and Rattler’s actual outcomes could differ
materially from what Diamondback and Rattler have expressed in
their forward-looking statements.
Factors that could cause the outcomes to differ
materially include (but are not limited to) the following: changes
in supply and demand levels for oil, natural gas, and natural gas
liquids, and the resulting impact on the price for those
commodities; the impact of public health crises, including epidemic
or pandemic diseases such as the COVID-19 pandemic, and any related
company or government policies or actions; actions taken by the
members of OPEC and Russia affecting the production and pricing of
oil, as well as other domestic and global political, economic, or
diplomatic developments, including any impact of the ongoing
Russian-Ukrainian conflict on the global energy markets and
geopolitical stability; regional supply and demand factors,
including delays, curtailment delays or interruptions of
production, or governmental orders, rules or regulations that
impose production limits; federal and state legislative and
regulatory initiatives relating to hydraulic fracturing, including
the effect of existing and future laws and governmental
regulations; and the risks and other factors disclosed in
Diamondback’s and Rattler’s filings with the Securities and
Exchange Commission, including their respective Forms 10-K, 10-Q
and 8-K, which can be obtained free of charge on the Securities and
Exchange Commission’s web site at http://www.sec.gov.
In light of these factors, the events
anticipated by Diamondback’s and Rattler’s forward-looking
statements may not occur at the time anticipated or at all.
Moreover, Diamondback and Rattler each operates in a very
competitive and rapidly changing environment and new risks emerge
from time to time. Neither Diamondback nor Rattler can predict all
risks, nor can they assess the impact of all factors on their
respective businesses or the extent to which any factor, or
combination of factors, may cause actual results to differ
materially from those anticipated by any forward-looking statements
they may make. Accordingly, you should not place undue reliance on
any forward-looking statements made in this news release. All
forward-looking statements speak only as of the date of this news
release or, if earlier, as of the date they were made. Neither
Diamondback nor Rattler intends to, and each disclaims any
obligation to, update or revise any forward-looking statements
unless required by applicable law.
Investor Contacts:
Rattler Midstream LP
Adam Lawlis+1
432.221.7467alawlis@rattlermidstream.com
Jared Carameros+1
432.247.6213jcarameros@rattlermidstream.com
Diamondback Energy, Inc.
Adam Lawlis+1
432.221.7467alawlis@diamondbackenergy.com
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