Introductory Note
As previously disclosed in the Current Report on Form 8-K filed by Pioneer Natural Resources Company (“Pioneer”) with the Securities and Exchange Commission (the “SEC”) on April 2, 2021, Pioneer and its wholly owned subsidiary Pioneer Natural Resources USA, Inc. (the “Purchaser”) entered into a Membership Interest Purchase Agreement (as amended, the “Purchase Agreement”) with Double Eagle III Midco 2, LLC (the “Seller”), an indirect wholly-owned subsidiary of DoublePoint Energy, LLC, pursuant to which the Seller agreed to sell all of the outstanding membership interests of Double Eagle III Midco 1 LLC (“Double Eagle”) to the Purchaser (the “Transaction”).
On May 4, 2021, the Transaction was consummated. The aggregate consideration paid to the Seller and the Sellers Designees (as defined in the Purchase Agreement) at the closing of the Transaction consisted of $1.0 billion in cash and 27,187,500 shares of Pioneer common stock (the “Share Consideration”). Prior to the closing of the Transaction, the Seller repaid all of Double Eagle’s outstanding indebtedness, other than the obligations under (a) Double Eagle’s existing senior unsecured notes, of which there is $650 million aggregate principle amount outstanding, (b) amounts outstanding under Double Eagle’s reserve based lending credit facility and (c) certain outstanding letters of credit. At the closing of the Transaction, the Purchaser also paid the Seller $20.0 million to cover certain transaction expenses and employee payments incurred by the Seller in connection with the Transaction. The purchase price was determined based on arm’s length negotiations. Prior to the closing of the Transaction, there were no material relationships between the Seller and the Seller Designees, on the one hand, and Pioneer or any of its affiliates, directors, officers or any associate of such directors or officers, on the other hand.
| Item 1.01 | Entry into a Material Definitive Agreement |
On May 4, 2021, Pioneer, the Seller and certain other direct and indirect equityholders of the Seller entered into a registration rights agreement (the “Registration Rights Agreement”) with respect to the Share Consideration pursuant to which, among other things and subject to certain restrictions, Pioneer is required to file with the SEC a registration statement on Form S-3 registering for resale of the Share Consideration and to conduct certain underwritten offerings thereof.
The foregoing description of the Registration Rights Agreement does not purport to be complete and is subject to, and qualified in its entirety by reference to, the full text of the Registration Rights Agreement, a copy of which is filed as Exhibit 10.1 hereto.
| Item 2.01. | Completion of Acquisition or Disposition of Assets |
The disclosure set forth under “Introductory Note” above is incorporated by reference in response to this Item 2.01.
| Item 3.02 | Unregistered Sales of Equity Securities |
The information set forth under “Introductory Note” above is incorporated by reference in response to this Item 3.02. The issuance of the Share Consideration was completed in reliance upon the exemption from the registration requirements of the Securities Act of 1933, as amended, provided by Section 4(a)(2) thereof as a transaction by an issuer not involving any public offering.
