Kodiak O&G announced the closing of its private offering of $650 million in aggregate principal amount of senior notes due 2019 in a private placement to eligible investors. The notes bear interest at 8.125% per annum and were issued at a price of 100% of their face amount.
The net proceeds of the offering, after deducting initial purchaser discounts and commissions, were approximately $633.8 million. Kodiak intends to use the net proceeds of the offering, together with other sources of liquidity (i) to finance the previously announced proposed acquisition of interests in approximately 50,000 net acres of oil and gas properties and related assets in the Williston Basin, North Dakota, (ii) to repay all of the outstanding debt under Kodiak's first lien credit agreement, to repay all of the outstanding debt under its second lien credit agreement and to pay related fees, premiums and expenses, (iii) to fund capital expenditures for drilling, development and infrastructure, principally in the Bakken play located in North Dakota and (iv) for general corporate purposes, including financing the potential acquisition of oil and gas properties in certain core areas, such as the Bakken play. The net proceeds of the offering, together with other amounts, will go into escrow pending the consummation of the proposed acquisition, at which time all amounts will be released to Kodiak.
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