Item 1.01.
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Entry into a Material Definitive Agreement.
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Underwriting Agreement
On February 26, 2019, Viper Energy Partners LP (the
Partnership
), a subsidiary of Diamondback Energy, Inc.
(
Diamondback
), entered into an Underwriting Agreement (the
Underwriting Agreement
), by and among the Partnership, Viper Energy Partners GP LLC (the
General Partner
), Viper Energy Partners LLC
(
OpCo
and, together with the Partnership and the General Partner, the
Partnership Parties
) and Credit Suisse Securities (USA) LLC, as representative of the several underwriters named therein (collectively, the
Underwriters
), providing for the offer and sale by the Partnership and the purchase by the Underwriters of 9,500,000 Common Units representing limited partner interests (
Common Units
) in the Partnership (the
Firm Unit Offering
) at a purchase price to the public of $32.00 per Common Unit. Pursuant to the Underwriting Agreement, the Partnership also granted the Underwriters an option for a period of 30 days to purchase up to an
additional 1,425,000 Common Units on the same terms (the
Optional Unit Offering
and, together with the Firm Unit Offering, the
Offering
), which was exercised in full on February 28, 2019.
The Offering closed on March 1, 2019. The Partnership received net proceeds of approximately $340.4 million (after deducting
underwriting discounts and commissions and estimated offering expenses) from the Offering. The Partnership intends to use the net proceeds from the Offering to purchase OpCo units. OpCo will use the net proceeds from the Offering to repay a portion
of the outstanding borrowings under its revolving credit facility and for general partnership purposes, which may include additional acquisitions.
The Underwriting Agreement contains customary representations, warranties and agreements of the Partnership Parties and customary conditions
to closing, obligations of the parties and termination provisions. The Partnership Parties have agreed to indemnify the Underwriters against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the
Securities Act
), or to contribute to payments the Underwriters may be required to make because of any of those liabilities.
The Offering was made pursuant to the Partnerships effective automatic shelf registration statement on Form
S-3
(File
No. 333-226411),
filed with the Securities and Exchange Commission (the
SEC
) on July 30, 2018 (the
Shelf Registration
Statement
), and a prospectus, which consists of a base prospectus, dated as of July 30, 2015, a preliminary prospectus supplement, filed with the SEC on February 26, 2019, and a final prospectus supplement, filed with the SEC on
February 28, 2019 (collectively, the
Prospectus
).
As more fully described under the caption Underwriting
(conflicts of interest) in the Prospectus, the Underwriters and certain of their affiliates are full service financial institutions engaged in various activities, which may include securities trading, commercial and investment banking,
financial advisory, investment management, investment research, principal investment, hedging, financing and brokerage activities. The Underwriters and certain of their affiliates have, from time to time, performed, and may in the future perform,
various commercial and investment banking and financial advisory services for the Partnership and its affiliates in the ordinary course of business for which they have received and would receive customary fees and expenses. Affiliates of certain of
the Underwriters are lenders under OpCos revolving credit facility and, accordingly, will receive a portion of the net proceeds of the Offering.
The foregoing description of the Underwriting Agreement is not complete and is qualified in its entirety by reference to the full text of the
Underwriting Agreement, which is filed as Exhibit 1.1 to this Current Report on Form
8-K
and incorporated in this Item 1.01 by reference.