Business Context and Reporting Period
This Form 8-K was filed by Midstates Petroleum Company, Inc. on September 13, 2012. The filing reports the entry into a material definitive agreement regarding a private placement of senior notes. Note: The input metadata references "Amplify Energy Corp.," but the filing text explicitly identifies the registrant as Midstates Petroleum Company, Inc.
Key Financial Metrics
- Debt Issuance: $600 million aggregate principal amount of 10.75% senior notes due 2020.
- Net Proceeds: Approximately $584.0 million after deducting discounts and estimated offering expenses.
- Interest Rate: 10.75%.
- Maturity Date: October 1, 2020.
- Expected Closing: October 1, 2012.
Material Changes and Use of Proceeds
The Company intends to use the net proceeds for the following purposes:
- Funding the cash portion of the purchase price for the acquisition of Eagle Energy Production, LLC assets.
- Paying expenses related to the Eagle Energy Acquisition, the private placement, and amendments to the revolving credit facility.
- Repaying outstanding borrowings under the Company's revolving credit facility.
- General corporate purposes.
Outlook, Risks, and Contingencies
Contingency on Acquisition: The offering is expected to close concurrently with the Eagle Energy Acquisition. If the acquisition does not close by October 1, 2012, proceeds will be held in escrow. If the acquisition fails to close by November 30, 2012, or is terminated prior to that date, the Notes will be mandatorily redeemed at 100% of the initial offering price plus accrued interest.
Related Party Transactions: Initial purchasers and affiliates have engaged in investment banking and commercial dealings with the Company. Some acted as arrangers or lenders under the revolving credit facility and as financial advisors for the Eagle Energy Acquisition, receiving customary fees.
Bridge Facility: Certain initial purchasers have agreed to provide an unsecured bridge credit facility if the offering is not consummated.
Investor Verification Checklist
- Verify the closing status of the Eagle Energy Acquisition to confirm if proceeds are released or escrowed.
- Confirm the exact amount of outstanding borrowings under the revolving credit facility to be repaid.
- Review the full text of the Purchase Agreement (Exhibit 1.1) for specific covenants and termination provisions.
- Monitor the November 30, 2012 deadline for the mandatory redemption contingency.