WPX tender offer for $500 million of 7½%, 6% notes oversubscribed

By Susanna Moon

Chicago, April 17 – WPX Energy said investors had tendered $328.7 million of its $350 million 7½% senior notes due 2020 and $628.4 million of its $1.1 billion 6% senior notes due 2022 as of 5 p.m. ET on April 16, the early tender date.

As announced April 3 the company is offering to purchase up to $500 million of three series of notes, including the 7½% notes and 6% notes along with its $500 million 8¼% senior notes due 2023.

The notes are listed in order of priority acceptance levels, and the 8¼% notes have a tender sub-cap of $50 million.

WPX expects to accept for purchase $328.7 million principal amount of the 2020 notes and $171.3 million principal amount of the 2022 notes, according to a company update on Tuesday.

Because the amount of 2020 notes and 2022 notes tendered before the early deadline exceeds the offer cap, the company will accept the early tendered 2022 notes using a proration factor of about 27.3%.

The company said it will accept for purchase none of the 2023 notes.

The tender offers are set to continue until midnight ET at the end of April 30, but the offers have been oversubscribed as of the early deadline and no more tenders will be accepted for purchase, according to a previous company announcement.

The total purchase price for each $1,000 principal amount will be $1,092.50 for the 7½% notes and $1,052.50 for the 6% notes. The purchase price would have been $1,130 per $1,000 of 8¼% notes.

The total amount includes an early tender premium of $50 per $1,000 principal amount of notes tendered before the early tender deadline.

The company will also pay accrued interest to but excluding the settlement date, which will be April 17 for early tendered notes.

Tendered notes may not be withdrawn as of the early deadline.

The company previously noted that tenders before the early tender date will be given priority over notes tendered after the early deadline, regardless of the priority level.

The company said it may, however, increase the tender cap at any time.

The company said it intends to fund the tender offers using proceeds from a recent sale of its remaining operations in the San Juan Basin in New Mexico and, if necessary, borrowings under its revolving credit facility or proceeds from a senior unsecured note offering.

The dealer managers for the tender offers are Merrill Lynch, Pierce, Fenner & Smith Inc. (888 292-0070 or 980-388-3646) and Citigroup Global Markets Inc. (800 558-3745 or 212 723-6106).

Global Bondholder Services Corp. (866 794-2200 or 212 430-3774 for banks and brokers) is the information agent.

WPX Energy is a Tulsa, Okla., oil-focused energy company.

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