Offering of 8% convertible preferreds also includes warrant coverage
By Devika Patel
Knoxville, Tenn., Nov. 2 - Plains Exploration & Production Co. negotiated a $450 million private placement of 8% convertible preferred stock on Oct. 28, according to an 8-K filed Wednesday with the Securities and Exchange Commission.
The company will sell 450,000 preferreds at $1,000 apiece to Energy Fund XV, LP, Energy Fund XV-A, LP, Energy Fund XV-B, LP and Energy XV Blocker (Plains), LLC.
The preferreds have an initial conversion price of $20.00 per common share, which is a 37.54% discount to the Oct. 27 closing price of $32.02.
The investors also will receive warrants for 9,121,000 common shares. The warrants are each exercisable at $20.00 for eight years. The strike price is also a 37.54% discount to the Oct. 27 closing share price.
Proceeds will be used to fund the company's share of investments in its oil and natural gas properties and assets, including the Lucius prospect, the Lucius Offset and the Phobos prospect.
Plains Exploration is a Houston-based oil and gas company.
| Issuer: | Plains Exploration & Production Co.
|
| Issue: | Convertible preferred stock
|
| Amount: | $450 million
|
| Preferreds: | 450,000
|
| Price: | $1,000
|
| Dividends: | 8%
|
| Conversion price: | $20.00
|
| Warrants: | For 9,121,000 shares
|
| Warrant expiration: | Eight years
|
| Warrant strike price: | $20.00
|
| Investors: | Energy Fund XV, LP, Energy Fund XV-A, LP, Energy Fund XV-B, LP and Energy XV Blocker (Plains), LLC
|
| Pricing date: | Oct. 28
|
| Stock symbol: | NYSE: PXP
|
| Stock price: | $32.48 at close Oct. 28
|
| Market capitalization: | $4.56 billion
|
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