LRR Energy, L.P. (NYSE: LRE) (“LRR Energy” or “LRE”) announced today the pricing of an underwritten public offering of 6,000,000 common units, of which 3,000,000 common units are being offered by LRR Energy and 3,000,000 common units are being offered by LRR Energy’s sponsor, Lime Rock Resources, at a public offering price of $16.84 per common unit. The underwriters have been granted a 30-day option to purchase up to 700,000 additional common units from LRR Energy and up to 200,000 additional common units from Lime Rock Resources. The offering is scheduled to close on March 22, 2013, subject to customary closing conditions.
LRE’s second lien term loan requires LRE to use 50% of the net cash proceeds from any equity offering to repay borrowings outstanding under LRE’s term loan. LRE is seeking, and expects to receive, a waiver of this requirement from the lender under LRE’s term loan. In the event LRE receives the waiver prior to the closing of the offering, LRE plans to use the net proceeds from the offering and from any exercise of the underwriters’ option to purchase additional common units from LRE to repay borrowings outstanding under LRE’s revolving credit facility. In the event LRE does not receive the waiver prior to the closing of the offering, LRE will use 50% of the net proceeds from the offering, or approximately $24.2 million, to repay borrowings outstanding under LRE’s term loan and the remaining net proceeds to repay borrowings outstanding under LRE’s revolving credit facility. LRE will not receive any proceeds from the sale of the common units held by Lime Rock Resources. LRE intends to use borrowings (including re-borrowings of the net offering proceeds) under its revolving credit facility to fund the purchase price for LRE’s previously announced acquisition of certain oil and natural gas properties in the Mid-Continent region in Oklahoma from Lime Rock Resources.
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