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Form 8-K Jones Energy, Inc. For: Aug 18

August 18, 2016 7:01 AM

 

 

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):  August 18, 2016

 

Jones Energy, Inc.

(Exact name of registrant as specified in its charter)

 

Delaware

 

001-36006

 

80-0907968

(State or Other Jurisdiction of
Incorporation or Organization)

 

(Commission File
Number)

 

(I.R.S. Employer Identification No.)

 

 

 

 

 

807 Las Cimas Parkway, Suite 350
Austin, Texas

 

78746

(Address of Principal Executive Offices)

 

(Zip Code)

 

Registrant’s telephone number, including area code:  (512) 328-2953

 

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:

 

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 



 

Item 1.01.                                        Entry into a Material Definitive Agreement

 

On August 18, 2016, Jones Energy Holdings, LLC, a Delaware limited liability company and the operating subsidiary of Jones Energy, Inc. (the “Company”), entered into a definitive purchase and sale agreement (the “Purchase Agreement”) with SCOOP Energy Company, LLC, an Oklahoma limited liability company (the “Seller”), to acquire oil and gas properties located in the STACK/SCOOP play in Central Oklahoma (the “Acquisition”). The oil and gas properties to be acquired in the Acquisition (collectively, the “Properties”) principally consist of approximately 18,000 undeveloped net acres in Canadian, Grady and McClain Counties, Oklahoma.  The purchase price for the Properties is $136.5 million, subject to customary purchase price adjustments, including, among others, adjustments for title and environmental defects and failures to obtain necessary consents.

 

In connection with the execution of the Purchase Agreement, the Company paid a deposit equal to approximately 15% of the Preliminary Purchase Price to an escrow agent. The Company expects to close the Acquisition prior to the end of the third quarter of 2016, subject to the completion of satisfactory title and environmental due diligence and the satisfaction of customary closing conditions. In addition, the Acquisition requires the approval of the Oklahoma probate court with jurisdiction over the assets of one of the equity owners of the Seller’s parent company (the “Court Approval”).

 

Each party’s separate obligation to consummate the respective portions of the Acquisition is conditioned upon, among other things, (i) the receipt of all required approvals, including the Court Approval, (ii) confirmation that the counterparties’ representations and warranties are true as of the closing, (iii) the counterparties’ performance, in all material respects, of all covenants and (iv) the absence of legal matters prohibiting the Acquisition.

 

The foregoing description of the Purchase Agreement is qualified in its entirety by reference to the text of the Purchase Agreement, a copy of which the Company plans to file as an exhibit to its Quarterly Report on Form 10-Q for the period ending September 30, 2016.

 

Item 7.01                                           Regulation FD Disclosure

 

On August 18, 2016, the Company issued a press release announcing the Acquisition. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

 

In addition, on August 18, 2016, the Company issued a press release announcing a public offering of Class A common stock and a concurrent public offering of convertible preferred stock. A copy of the press release is attached hereto as Exhibit 99.2 and is incorporated by reference.

 

The information in Item 7.01 of this Current Report on Form 8-K, including the attached Exhibit 99.1 and Exhibit 99.2, is being “furnished” pursuant to Item 7.01 and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, and is not incorporated by reference into any filing, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

 

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Cautionary Note Regarding Forward-Looking Statements

 

This Current Report on Form 8-K includes forward-looking statements within the meaning of Section 27(a) of the Securities Act of 1933, as amended, and Section 21(e) of the Securities Exchange Act of 1934, as amended. Forward-looking statements can be identified by words such as “anticipates,” “believes,” “forecasts,” “plans,” “estimates,” “expects,” “intends,” “should,” “will” or other similar expressions. Such statements are based on management’s current expectations, estimates and projections, which are subject to a wide range of uncertainties and business risks. These forward-looking statements include, but are not limited to, statements regarding the anticipated closing timeframe of the Acquisition. Actual results may differ materially from those included in the forward-looking statements due to a number of factors, including, but not limited to: disruptions of the Company’s ongoing business, distraction of management and employees, increased expenses and adversely affected results of operations from organizational modifications due to the Acquisition; the inability of the parties to satisfy the conditions to the consummation of the Acquisition; the inability to obtain the AKM Consent; the risk that expected efficiencies from the transaction may not be fully realized; changes in natural gas, natural gas liquid (“NGL”) and oil prices; liquidity constraints, including those resulting from the cost or unavailability of financing due to debt and equity capital and credit market conditions, changes in our credit rating, our compliance with loan covenants, the increasing credit pressure on our industry or demands for cash collateral by counterparties to derivative and other contracts; global geopolitical and macroeconomic factors; general economic conditions, including interest rates; changes in local, regional, national and global demand for natural gas, oil and NGL; changes in, adoption of and compliance with laws and regulations, including decisions and policies concerning the environment, climate change, greenhouse gas or other emissions, natural resources, and fish and wildlife, hydraulic fracturing, water use and drilling and completion techniques, as well as the risk of legal proceedings arising from such matters, whether involving public or private claimants or regulatory investigative or enforcement measures; impact of U.S. dollar exchange rates on oil, NGL and natural gas prices; elimination of federal income tax deductions for oil and gas exploration and development; drilling results; shortages of oilfield equipment, services and personnel; the availability of storage and refining capacity; operating risks such as unexpected drilling conditions; transportation constraints; weather conditions; changes in maintenance, service and construction costs; permitting delays; outcome of contingencies such as legal proceedings; inadequate supplies of water and/or lack of water disposal sources; and the other risks discussed in the Company’s periodic filings with the Securities and Exchange Commission, including the Risk Factors section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 and Quarterly Reports on Form 10-Q filed hereafter. The Company undertakes no obligation to publicly correct or update the forward-looking statements to reflect future events or circumstances.

 

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Item 9.01                                           Financial Statements and Exhibits

 

(d)                                 Exhibits

 

Exhibit No.

 

Description

99.1

 

Press Release of Jones Energy, Inc., dated August 18, 2016 (Acquisition).

99.2

 

Press Release of Jones Energy, Inc., dated August 18, 2016 (Offerings).

 

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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.

 

Date:  August 18, 2016

 

 

 

JONES ENERGY, INC.

 

 

 

 

 

By:

/s/ Robert J. Brooks

 

 

Robert J. Brooks

 

 

Executive Vice President and Chief Financial Officer

 

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EXHIBIT INDEX

 

Exhibit No.

 

Description

99.1

 

Press Release of Jones Energy, Inc., dated August 18, 2016 (Acquisition).

99.2

 

Press Release of Jones Energy, Inc., dated August 18, 2016 (Offerings).

 

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Exhibit 99.1

 

JONES ENERGY, INC. ANNOUNCES STACK/SCOOP ACQUISITION

 

Austin, TXAugust 18, 2016 — Jones Energy, Inc. (NYSE: JONE) (“Jones Energy” or “the Company”) today announced the signing of a definitive purchase and sale agreement to acquire approximately 18,000 net acres primarily in southern Canadian and northern Grady Counties in Oklahoma for $136.5 million.  The Company anticipates the transaction will close by the end of September, subject to completion of due diligence, satisfaction of customary closing conditions and obtaining certain consents.

 

Highlights

 

·                  Enhances Midcontinent position with entry into one of the most coveted resource plays in the U.S.

 

·                  Approximately 70% of acreage is operated with an average working interest of approximately 50%

 

·                  Majority of acreage in oil window, which drives compelling returns

 

·                  Implied acreage value of approximately $7,600 per net acre

 

·                  Recent well results on par with the best of the STACK/SCOOP

 

·                  Multiple target zones provide significant stacked pay potential

 

Jonny Jones, the Company’s Founder, Chairman, and CEO, commented, “This transformative transaction gives Jones Energy a scalable footprint in one of the most coveted resource plays in the U.S.  We identified this area as a primary target for Jones over a year ago and are thrilled to be acquiring assets in the heart of the STACK/SCOOP play.  The acreage we are acquiring is highly operated, which puts us in a solid position to create value through our best-in-class Midcontinent operations.  We truly believe that our acreage has the best attributes of both the STACK and the SCOOP plays based on our in-depth geological analysis.  Recent well results on our footprint are on par with the best in the play.”  Mr. Jones went on to say, “This acquisition high-grades our Midcontinent position and significantly enhances the growth outlook for Jones Energy in 2016 and beyond.”

 

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About Jones Energy

 

Jones Energy, Inc. is an independent oil and natural gas company engaged in the development and acquisition of oil and natural gas properties in the Anadarko and Arkoma basins of Texas and Oklahoma.  Additional information about Jones Energy may be found on the Company’s website at: www.jonesenergy.com.

 

Investor Contacts:

 

Cathleen King, 512-493-4834

Investor Relations

Or

Robert Brooks, 512-328-2953

Executive Vice President & CFO

 

Forward-Looking Statements

 

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. Without limiting the generality of the foregoing, forward-looking statements contained in this press release specifically include the expectations of plans, strategies, objectives and anticipated financial and operating results of the Company.  These statements are based on certain assumptions made by the Company based on management’s experience and perception of historical trends, current economic and market conditions, anticipated future developments and other factors believed to be appropriate.  Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company, which may cause actual results to differ materially from those implied or expressed by the forward-looking statements.  These include, but are not limited to, changes in oil and natural gas prices, weather and environmental conditions, the timing and amount of planned capital expenditures, availability and method of funding of acquisitions and divestitures, uncertainties in estimating proved reserves and forecasting production results, operational factors affecting the commencement or maintenance of producing wells, the condition of the capital markets generally, as well as the Company’s ability to access them, the proximity to and capacity of transportation facilities, and uncertainties regarding environmental regulations or litigation and other legal or regulatory developments affecting the Company’s business and other important factors that could cause actual results to differ materially from those projected as described in the Company’s reports filed with the SEC.

 

Any forward-looking statement speaks only as of the date on which such statement is made and the Company undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law.

 

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Exhibit 99.2

 

JONES ENERGY, INC. LAUNCHES PUBLIC OFFERINGS OF

CLASS A COMMON STOCK AND SERIES A PERPETUAL CONVERTIBLE PREFERRED STOCK

 

Austin, TXAugust 18, 2016 — Jones Energy, Inc. (NYSE: JONE) (“Jones Energy” or the “Company”) announced today the launch of an underwritten public offering of 14,000,000 shares of its Class A common stock, subject to market conditions. The underwriters will have an option to purchase up to an additional 2,100,000 shares of Class A common stock from the Company.

 

In addition, the Company also announced today the launch of an underwritten public offering of 1,000,000 shares of its Series A Perpetual Convertible Preferred Stock at an issue price of $50 per share, subject to market conditions. The underwriters will have an option to purchase up to an additional 150,000 shares of Series A Perpetual Convertible Preferred Stock from the Company.

 

The Company intends to use the net proceeds from the offerings to fund all or a portion of the purchase price of the Company’s acquisition of oil and gas properties located in the STACK/SCOOP play in the Eastern Anadarko Basin in Central Oklahoma. Any net proceeds in excess of the purchase price for the pending acquisition will be used for general corporate purposes, which may include leasehold interest and property acquisitions and working capital.

 

Credit Suisse Securities (USA) LLC and J.P. Morgan Securities LLC are acting as joint book-running managers for the offerings. When available, copies of the prospectus supplements for the offerings may be obtained on the website of the Securities and Exchange Commission (“SEC”), www.sec.gov, or by contacting the underwriters as follows:

 

Credit Suisse Securities (USA) LLC

Attention: Prospectus Department

One Madison Avenue

New York, NY 10010

Telephone: (1-800-221-1037)

Email: [email protected]

 

J.P. Morgan Securities LLC

c/o Broadridge Financial Solutions

Attention: Prospectus Department (1-866-803-9204)

1155 Long Island Ave.

Edgewood, NY 11717

 

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The Class A common stock and the Series A Perpetual Convertible Preferred Stock will be issued and sold pursuant to an effective shelf registration statement on Form S-3 previously filed with the SEC.

 

This press release does not constitute an offer to sell or a solicitation of an offer to buy Class A common stock, Series A Perpetual Convertible Preferred Stock or any other securities, nor shall there be any sale of these securities in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. The offering of these securities may be made only by means of a prospectus and related prospectus supplement meeting the requirements of Section 10 of the Securities Act of 1933, as amended.

 

About Jones Energy

 

Jones Energy, Inc. is an independent oil and natural gas company engaged in the development and acquisition of oil and natural gas properties in the Anadarko and Arkoma basins of Texas and Oklahoma.  Additional information about Jones Energy may be found on the Company’s website at: www.jonesenergy.com.

 

Investor Contact:

 

Cathleen King, 512-493-4834

Investor Relations

Or

Robert Brooks, 512-328-2953

Executive Vice President & CFO

 

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