| Item 1.01 | Entry into a Material Definitive Agreement. |
VEN Bakken Purchase Agreement
On April 18, 2019, Northern Oil and Gas, Inc. (the “Company”) entered into a Purchase and Sale Agreement (the “Purchase Agreement”) with VEN Bakken, LLC (“Seller”), pursuant to which the Company has agreed to acquire, effective as of July 1, 2019, certain oil and gas properties and interests (the “Assets”). Seller is a wholly-owned subsidiary of Flywheel Bakken, LLC, a portfolio company of the Kayne Private Energy Income Funds.
Upon closing under the Purchase Agreement, Seller will receive consideration of $165.0 million in cash, 5,602,147 shares of Company common stock (the “Shares”) and $130.0 million in principal amount of a 6.0% Senior Unsecured Promissory Note due 2022 (the “Promissory Note”). The cash and promissory note portions of the consideration are subject to adjustments resultingfrom pre- and post-effective date revenue and expense allocation and procedures relating to customary title and environmental matters.
The obligations of the parties to complete the transactions contemplated by the Purchase Agreement are subject to the satisfaction or waiver of customary closing conditions set forth in the Purchase Agreement. Upon termination of the Purchase Agreement under specified circumstances, generally relating to a failure by the Company to close or fulfill in any material respect any of its obligations under the Purchase Agreement, the Company would be required to forfeit to the Seller a cash deposit in the amount of $31.0 million.
The foregoing description of the Purchase Agreement and the transactions contemplated thereby does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Purchase Agreement (including Exhibit F thereto, the form of Promissory Note), which is filed as Exhibit 2.1 hereto and incorporated herein by reference.
The Purchase Agreement has been included with this Current Report on Form 8-K (this “report”) to provide investors and security holders with information regarding the terms of the transactions contemplated therein. It is not intended to provide any other factual information about the Company, the Seller or the Assets. The representations, warranties, covenants and agreements contained in the Purchase Agreement, which are made only for purposes of the Purchase Agreement and as of specific dates, are solely for the benefit of the parties to the Purchase Agreement, may be subject to limitations agreed upon by the parties (including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the Purchase Agreement instead of establishing these matters as facts) and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors and security holders. Company security holders should not rely on the representations, warranties, covenants and agreements or any descriptions thereof as characterizations of the actual state of facts or condition of the Company, Seller or the Assets. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the Purchase Agreement, which subsequent information may or may not be fully reflected in the Company’s public disclosures.
Amendment to the Credit Agreement
On April 18, 2019, the Company entered into an amendment (the “Amendment”) to its amended and restated credit agreement, dated October 5, 2018 (the “Credit Agreement”), governing the Company’s revolving credit facility with Royal Bank of Canada, as administrative agent, and the lenders party thereto. Pursuant to the Amendment, the Credit Agreement has been amended to permit the Company to issue the Promissory Note.
A copy of the Amendment is attached hereto as Exhibit 10.1 and is incorporated herein by reference. The description of the Amendment in this report is a summary and is qualified in its entirety by the terms of the Amendment.
| Item 3.02. | Unregistered Sales of Equity Securities. |
Under the Purchase Agreement, the Company has agreed to issue the Shares. The Shares will serve as partial consideration for the acquisition of the Assets and will be issued in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), to a limited number of persons who are “accredited investors” or “sophisticated persons” as those terms are defined in Rule 501 of
