Finance & Investing | Fundraising | Capital Markets | Private Equity Activity

American Energy - Permian Finalizes $295MM Offering

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American Energy – Permian Basin, LLC, an affiliate of American Energy Partners, LP, announced the completion of its offering of $295 million of 8.00% Senior Secured Second Lien Notes due 2020 (Notes) in an unregistered offering to institutional investors.  The net proceeds from the offering of the Notes, which were approximately $290 million, will be used by AEPB to repay a portion of the borrowings currently outstanding under its revolving credit facility. 

Jeffrey L. Mobley, AEPB's Chief Financial Officer, commented, "We are pleased to announce the closing of another very successful transaction for our company.  This transaction provides AEPB with enhanced liquidity at a very attractive cost and will enable us to continue executing our business plan while also maintaining flexibility to capitalize on opportunities and potentially accelerate drilling activity if oil and natural gas prices further improve.  As we achieve anticipated growth in production and proved reserves in the quarters ahead, we expect the company's liquidity to further increase through cash flow growth and positive borrowing base redeterminations under our revolving credit facility." 

Aubrey K. McClendon, AEPB's Chief Executive Officer, commented, "This transaction enhances the financial strength of our company and demonstrates market confidence in the quality of our Permian Basin assets and operations.  I am proud of the responsiveness of the AEPB management team to challenging market conditions during the last eight months and their success in preserving attractive profit margins and investment returns through improved operational efficiencies and significant capital and operating cost improvements.  Since the fall of 2014, we have achieved an approximate 40% reduction in well costs and, during the 2015 first quarter, we generated production growth of 114% year over year and 16% sequentially.  We are targeting to deliver average daily production of approximately of 21,000 to 24,000 barrels of oil equivalent for the 2015 full year, an increase of approximately 85% to 110% year over year.  I look forward to watching this company continue to deliver strong performance in the months and years ahead."

Goldman, Sachs & Co. and Credit Suisse acted as joint global coordinators and joint book-running managers for the notes offering. BofA Merrill Lynch, Morgan Stanley and Wells Fargo Securities also acted as joint book-running managers for the offering.  Sullivan & Cromwell LLP acted as legal advisor to AEPB in connection with the notes offering and Latham & Watkins LLP acted as legal advisor to the initial purchasers.