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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): May 18, 2011
Concho Resources Inc.
(Exact Name of Registrant as Specified in Its Charter)
Delaware
(State or Other Jurisdiction of Incorporation)
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001-33615
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76-0818600 |
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(Commission File Number)
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(I.R.S. Employer Identification No.) |
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550 West Texas Avenue, Suite 100 |
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Midland, Texas
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79701 |
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(Address of Principal Executive Offices)
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(Zip Code) |
Registrants telephone number, including area code: (432) 683-7443
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following provisions (see General
Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 1.01 |
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Entry into a Material Definitive Agreement. |
On May 18, 2011, Concho Resources Inc. (the Company) and certain of its subsidiaries entered
into an underwriting agreement (the Underwriting Agreement) with Merrill Lynch, Pierce, Fenner &
Smith Incorporated, as representative of the underwriters named in Schedule 1 thereto
(collectively, the Underwriters), in connection with an underwritten public offering of $600
million aggregate principal amount of the Companys 6.5% Senior Notes due 2022 (the Notes). The
issuance and sale of the Notes has been registered under the Securities Act of 1933 (the
Securities Act) pursuant to an automatic shelf Registration Statement on Form S-3 (Registration
No. 333-161809), as amended, of the Company, filed with the Securities and Exchange Commission (the
Commission) on September 9, 2009 (the Registration Statement). The Notes will be issued
pursuant to a new supplemental indenture to the Companys existing indenture among the Company, its
subsidiaries and Wells Fargo Bank, National Association, as Trustee, and will be guaranteed on a
senior unsecured basis by the Companys subsidiaries. Closing of the issuance and sale of the
Notes occurred on May 23, 2011. A legal opinion related to the Notes is filed herewith as Exhibit
5.1.
The Underwriting Agreement contains customary representations, warranties and agreements by
the Company and customary conditions to closing, obligations of the parties and termination
provisions. Additionally, the Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act, or to contribute to payments the
Underwriters may be required to make because of any of those liabilities. Furthermore, the Company
has agreed with the Underwriters not to offer or sell any debt securities issued or guaranteed by
the Company having a term of more than one year (other than the Notes) for a period of 45 days
after the date of the Underwriting Agreement without the prior written consent of Merrill Lynch,
Pierce, Fenner & Smith Incorporated.
The Underwriters or their affiliates have from time to time provided investment banking,
commercial banking and financial advisory services to the Company, for which they have received
customary compensation. The Underwriters and their affiliates may provide similar services in the
future. In particular, certain of the underwriters or their affiliates are lenders under the
Companys credit facility and will receive a portion of the net proceeds from this offering. In
addition, from time to time, certain of the Underwriters and their affiliates may effect
transactions for their own account or the account of customers, and hold on behalf of themselves or
their customers, long or short positions in the Companys debt or equity securities or loans, and
may do so in the future.
The foregoing description of the Underwriting Agreement is qualified in its entirety by
reference to such Underwriting Agreement, a copy of which is filed herewith as Exhibit 1.1 and is
incorporated herein by reference.
Supplemental Indenture for 6.5% Senior Notes due 2022
On May 23, 2011, the Company completed the public offering of the Notes. The Notes are
fully and unconditionally guaranteed on a senior unsecured basis by certain of the Companys
subsidiaries (collectively, the Subsidiary Guarantors): COG Holdings LLC, COG Operating LLC, COG
Realty LLC, Concho Energy Services LLC, Concho Oil & Gas LLC and Quail Ranch LLC.
The terms of the Notes are governed by the indenture dated as of September 18, 2009 (the Base
Indenture), among the Company, certain of the Subsidiary Guarantors, and Wells Fargo Bank,
National Association, as trustee (the Trustee), as amended and supplemented by the fourth
supplemental indenture, dated as of May 23, 2011 (the Supplemental Indenture; the Base Indenture,
as amended and supplemented by the Supplemental Indenture, the Indenture).
The Notes will mature on January 15, 2022, and interest is payable on the Notes on each
January 15 and July 15, commencing on January 15, 2012. The Company may redeem some or all of the
Notes at any time on or after January 15, 2017 at the redemption prices specified in the Indenture.
The Company may also redeem up to 35% of the Notes using all or a portion of the net proceeds of
certain public sales of equity interests completed before July 15, 2014 at a redemption price as
specified in the Indenture. If the Company sells certain assets or experiences specific kinds of
change of control, each as described in the Indenture, each holder of the Notes will have the right
to require the Company to repurchase the Notes at a purchase price described in the Indenture plus
accrued and unpaid interest, if any, to the date of repurchase.
The Notes are the Companys senior unsecured obligations, and will rank equally in right of
payment with all of the Companys existing and future senior debt, and will rank senior in right of
payment to all of the Companys future subordinated debt. The Notes will be effectively
subordinated to all of the Companys existing and future secured debt to the extent of the value of
the collateral securing such indebtedness.
The Indenture restricts the Companys ability and the ability of certain of its subsidiaries
to, among other things: (i) incur additional indebtedness; (ii) pay distributions or dividends on
equity or purchase, redeem or otherwise acquire equity; (iii) make certain investments; (iv) use
assets as collateral in other transactions; (v) sell certain assets or merge with or into other
companies; and (vi) enter into transactions with affiliates. These covenants are subject to a
number of important exceptions and qualifications.
The Indenture contains customary events of default, including:
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default in any payment of interest on any Note when due, continued for 30 days; |
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default in the payment of principal of or premium, if any, on any Note when due; |
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failure by the Company to comply with its obligations under the Indenture, in
certain cases subject to notice and grace periods; |
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payment defaults and accelerations with respect to other indebtedness of the Company
and its Restricted Subsidiaries (as defined in the Indenture) in the aggregate
principal amount of $30.0 million or more; |
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certain events of bankruptcy, insolvency or reorganization of the Company or a
Significant Subsidiary (as defined in the Indenture) or group of Restricted
Subsidiaries that, taken together, would constitute a Significant Subsidiary; |
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failure by the Company or any Significant Subsidiary or group of Restricted
Subsidiaries that, taken together, would constitute a Significant Subsidiary to pay
certain final judgments aggregating in excess of $30.0 million within 60 days; and |
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any Subsidiary Guarantee of a Significant Subsidiary or group of Restricted
Subsidiaries that, taken together, would constitute a Significant Subsidiary, ceases to
be in full force and effect, is declared null and void in a judicial proceeding or is
denied or disaffirmed by its maker. |
If an event of default under the Indenture occurs and is continuing, the Trustee or the
holders of at least 25% in principal amount of the outstanding Notes may declare the principal of,
premium, if any, and accrued and unpaid interest, if any, on the Notes to be due and payable, or,
in the case of certain events of default relating to bankruptcy, insolvency or reorganization,
those amounts will automatically become immediately due and payable.
Other material terms of the Notes, the Base Indenture and the Supplemental Indenture are
described in the prospectus supplement, dated May 18, 2011, as filed by the Company and the
Subsidiary Guarantors with the Commission on May 19, 2011. The foregoing descriptions of the
Indenture and the Notes are qualified in their entirety by reference to such Indenture (including
the form of Notes attached thereto), a copy of which is filed herewith as Exhibit 4.1 and is
incorporated herein by reference.
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Item 2.03 |
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Creation of a Direct Financial Obligation or an Obligation under an Off-Balance
Sheet Arrangement of a Registrant. |
The description contained under Item 1.01 above is incorporated by reference in its
entirety into this Item 2.03.
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Item 9.01 |
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Financial Statements and Exhibits. |
(d) Exhibits.
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Exhibit Number |
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Description |
1.1
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Underwriting Agreement dated May 18, 2011 by and among
Concho Resources Inc., the subsidiary guarantors named
therein and Merrill Lynch, Pierce, Fenner & Smith
Incorporated, as representative of the underwriters named
therein. |
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4.1
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Fourth Supplemental Indenture, dated May 23, 2011, between
Concho Resources Inc., the subsidiary guarantors named
therein, and Wells Fargo Bank, National Association, as
trustee. |
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4.2
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Form of 6.5% Senior Notes due 2022 (included in Exhibit 4.1). |
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5.1
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Opinion of Vinson & Elkins L.L.P. |
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23.1
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Consent of Vinson & Elkins L.L.P. (included in Exhibit 5.1). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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CONCHO RESOURCES INC.
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Date: May 23, 2011 |
By: |
/s/ C. WILLIAM GIRAUD
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Name: |
C. William Giraud |
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Title: |
Senior Vice President and General Counsel |
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EXHIBIT INDEX
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Exhibit Number |
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Description |
1.1
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Underwriting Agreement dated May 18, 2011 by and among
Concho Resources Inc., the subsidiary guarantors named
therein and Merrill Lynch, Pierce, Fenner & Smith
Incorporated, as representative of the underwriters named
therein. |
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4.1
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Fourth Supplemental Indenture, dated May 23, 2011, between
Concho Resources Inc., the subsidiary guarantors named
therein, and Wells Fargo Bank, National Association, as
trustee. |
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4.2
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Form of 6.5% Senior Notes due 2022 (included in Exhibit 4.1). |
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5.1
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Opinion of Vinson & Elkins L.L.P. |
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23.1
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Consent of Vinson & Elkins L.L.P. (included in Exhibit 5.1). |