| Item 1.01. | Entry into a Material Definitive Agreement. |
The information contained in Item 2.03 of this Current Report on Form 8-K is incorporated into this Item 1.01 by reference.
| Item 2.03. | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
On September 12, 2023, Permian Resources Operating, LLC (the “Issuer”), a Delaware limited liability company and subsidiary of Permian Resources Corporation (NYSE: PR) (the “Company” and, together with the Issuer, “Permian Resources”), issued $500.0 million aggregate principal amount of its 7.000% senior notes due 2032 (the “Notes”). The Notes were issued pursuant to the indenture, dated as of September 12, 2023 (the “Indenture”), by and among the Issuer, the guarantors named therein (the “Guarantors”) and Computershare Trust Company, N.A., as trustee (the “Trustee”). Additional information regarding the Notes and the Indenture, pursuant to which such Notes were issued, is set forth below.
Indenture and Senior Notes
The Notes are senior unsecured obligations of the Issuer. The Notes are fully and unconditionally guaranteed on a senior unsecured basis by the existing subsidiaries of the Issuer that guarantee its indebtedness under its senior secured credit facility (the “credit facility”). The Notes are also guaranteed on a senior unsecured basis by the Company, the Issuer’s sole managing member and controlling equity holder.
Maturity and Interest
The Notes will mature on January 15, 2032. The Notes bear interest at an annual rate of 7.000%. Interest on the Notes is payable on January 15 and July 15 of each year, and the first interest payment is due on January 15, 2024.
Special Mandatory Redemption
If (i) Permian Resources’ previously announced pending merger (the “Earthstone Merger”) with Earthstone Energy, Inc. (“Earthstone”) has not been completed on or prior to April 21, 2024 (the “Outside Date”) or (ii) prior to the Outside Date, (a) the agreement and plan of merger dated August 21, 2023 by and between Permian Resources, Earthstone and their respective subsidiaries party thereto is terminated or (b) Permian Resources has decided that it will not pursue the consummation of the Earthstone Merger or has determined in its sole discretion that the consummation of the Earthstone Merger cannot or is not reasonably likely to be satisfied by the Outside Date (the earlier to occur of the events described in clauses (i) and (ii) of this sentence, a “Special Mandatory Redemption Event”), the Issuer will be required to redeem all of the outstanding Notes on the Special Mandatory Redemption Date (as defined in the Indenture) at a redemption price equal to 100% of the initial issue price of such Notes, plus accrued and unpaid interest from the date of initial issuance of such Notes to, but not including, the Special Mandatory Redemption Date.
Optional Redemption
At any time prior to January 15, 2027, the Issuer may, on any one or more occasions, redeem up to 40% of the aggregate principal amount of the Notes with an amount of cash not greater than the net cash proceeds of certain equity offerings at a redemption price equal to 107.000% of the principal amount of the Notes redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, if at least 60% of the aggregate principal amount of the Notes remains outstanding immediately after such redemption and the redemption occurs within 180 days of the closing date of such equity offering.
At any time prior to January 15, 2027, the Issuer may, on any one or more occasions, redeem all or a part of the Notes at a redemption price equal to 100% of the principal amount of the Notes redeemed, plus a “make-whole” premium and accrued and unpaid interest, if any, to, but excluding, the redemption date.
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