Secondary offerings and capital raises often add pressure to a stock. Don’t tell it to Kodiak Oil & Gas Corporation (NYSE: KOG). The company raised the size of its stock offering and debt offering on demand.
The size of the stock offering was increased from 37,500,000 shares to 42,000,000 shares of common stock at a public offering price of $7.75 per share. Credit Suisse, KeyBanc Capital Market, RBC Capital Markets, and Wells Fargo Securities were the joint book-running managers and these underwriters have an overallotment option to purchase up to 6,300,000 additional shares.
Kodiak also announced that it “upsized” a private placement offering of $650 million of senior notes due in 2019 from the previously announced $550 million. The coupon and yield priced at 8.125% at PAR.
Kodiak is using the proceeds to finance its previously announced acquisition of interests in approximately 50,000 net acres of oil and gas properties and related assets in the Williston Basin, North Dakota. The proceeds will also help to repay its debt under a first lien credit agreement, to repay second lien debt, for cap-ex in the Bakken shale, and for general corporate purposes.
Kodiak has a market cap of about $1.66 billion and its $7.90 share price compares to a 52-week range of $2.43 to $8.10.
JON C. OGG
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