The common stock offering was priced at $20.50 per share. Delta estimates that the net proceeds from the offering of common stock will be approximately $121.7 million, after deducting underwriting discounts and commissions and estimated expenses.
The convertible senior notes will be Delta's senior unsecured obligations. The convertible senior notes will be guaranteed on a senior unsecured basis by Delta's wholly owned subsidiaries.
The convertible senior notes will pay interest semiannually at a rate of 3.75% per annum, and will be convertible at the holder's option, at any time, at an initial conversion rate of 32.9598 shares per $1,000 principal amount of convertible senior notes, subject to adjustment in certain circumstances, which is equivalent to an initial conversion price of approximately $30.34 per share. The initial conversion price represents a 48% conversion premium to the offer price of $20.50 per share of Delta's common stock in the concurrent common stock offering. The convertible senior notes are convertible into cash, shares of Delta common stock or a combination of cash and common stock, at Delta's option.
The convertible senior notes will be redeemable at Delta's option on or after May 6, 2012 at a redemption price equal to 100% of the principal amount of the convertible senior notes being redeemed plus accrued and unpaid interest. The convertible senior notes will be subject to repurchase at the option of holders on May 1, 2012, May 1, 2017, May 1, 2022, May 1, 2027 and May 1, 2032, and upon the occurrence of certain fundamental changes, at a repurchase price equal to 100% of the principal amount of the convertible senior notes being repurchased plus accrued and unpaid interest.
Delta estimates that the net proceeds from the offering of convertible senior notes will be approximately $96.8 million, after deducting underwriting discounts and commissions and estimated expenses.
Delta intends to use the net proceeds it receives from the offering of Delta common stock to pay down approximately $117.0 million outstanding under its senior secured credit facility, and to use the remaining common stock proceeds and the proceeds of the convertible senior notes offering for capital expenditures and other general corporate purposes.
Delta expects to close the sale of the shares of common stock and the sale of the convertible senior notes on April 25, 2007, subject to customary closing conditions. Each of the offerings is being made only by means of a prospectus and related prospectus supplements, which will be filed with the U.S. Securities and Exchange Commission. A copy of the prospectus and prospectus supplement relating to each offering may be obtained from the offices of J.P. Morgan Securities Inc., Prospectus Library, 4 Chase Metrotech Center, CS Level, Brooklyn, NY 11245, or by calling (718) 242-8002; from Lehman Brothers Inc. c/o Broadridge Prospectus Fulfillment, 1155 Long Island Avenue, Edgewood, NY 11717 E-mail: Qiana.Smith@Broadridge.com, Fax: 631-254-7268; or from Deutsche Bank Securities Inc., Attn: Prospectus Dept., 100 Plaza One, Jersey City, NJ 07311, E-mail: email@example.com, Telephone: (800) 503-4611.
Delta Petroleum Corporation is a Denver-based independent energy company engaged primarily in the exploration for, and the development, production, and sale of, natural gas and crude oil. The Company's core areas of operations are the Rocky Mountain and Gulf Coast regions, which together comprise the majority of its proved reserves, production and long-term growth prospects. The Company has a significant drilling inventory that consists of proved and unproved locations, the majority of which are located in its Rocky Mountain development projects. The Company also has extensive exploration activities in the Columbia River Basin in Washington state, in the Hingeline play in Central Utah and the Paradox Basin of southeastern Utah and southwestern Colorado.
Most Popular Articles
From the Career Center
Jobs that may interest you