Attached files
file | filename |
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EX-2.1 - EX-2.1 - QR Energy, LP | h84538exv2w1.htm |
EX-99.1 - EX-99.1 - QR Energy, LP | h84538exv99w1.htm |
EX-99.2 - EX-99.2 - QR Energy, LP | h84538exv99w2.htm |
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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
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): September 12, 2011
QR Energy, LP
(Exact name of registrant as specified in its charter)
Delaware | 001-35010 | 90-0613069 | ||
(State or other jurisdiction | (Commission | (IRS Employer | ||
of incorporation or organization) | File Number) | Identification No.) |
5 Houston Center
1401McKinney Street, Suite 2400
Houston, Texas 77010
(Address of principal executive office) (Zip Code)
(713) 452-2200
(Registrants telephone number, including area code)
1401McKinney Street, Suite 2400
Houston, Texas 77010
(Address of principal executive office) (Zip Code)
(713) 452-2200
(Registrants telephone number, including area code)
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)) |
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Item 1.01. Entry into a Material Definitive Agreement.
On September 12, 2011, QR Energy, LP, a Delaware limited partnership (the Partnership)
entered into a Purchase and Sale Agreement (the Purchase Agreement), by and among the
Partnership, QRE Operating, LLC, a Delaware limited liability company (OLLC), Quantum Resources
A1, LP, a Delaware limited partnership (QRA), QAB Carried WI, LP, a Delaware limited partnership
(QAB), QAC Carried WI, LP, a Delaware limited partnership (QAC), and Black Diamond Resources,
LLC, a Delaware limited liability company (Black Diamond, and collectively with QRA, QAB and QAC,
the Sellers), pursuant to which the Sellers agreed to transfer certain oil and natural gas
properties concentrated in Texas, Oklahoma and New Mexico to the Partnership in exchange for
approximately $234 million in cash consideration (which includes $7 million of estimated
transaction fees) and the issuance by the Partnership to the Sellers of 16,666,667 units of a new
class of Partnership units to be designated as Class C Convertible Preferred Units with a par
value of $21.00, which will be convertible into common units representing limited partner interests
in the Partnership (Common Units) on a one-to-one basis, subject to adjustment. The cash portion
of the acquisition consideration will be funded through borrowings under the Partnerships
revolving credit facility. These borrowings are subject to lender approval of an expected increase
to the Partnerships current $330 million borrowing base of $300 million related to the acquired
proved reserves, resulting in a total borrowing base of $630 million effective upon closing.
The Purchase Agreement contains representations and warranties, covenants and indemnification
provisions that are typical for transactions of this nature. The transactions contemplated by the
Purchase Agreement are expected to close on or about October 1, 2011, subject to certain third
party approvals and other customary closing conditions.
At the closing of the transactions contemplated by the Purchase Agreement, the parties will
enter into certain ancillary agreements, including:
| An amendment to the Partnerships First Amended and Restated Agreement of Limited Partnership (the Class C Amendment), designating and creating the Class C Convertible Preferred Units and setting forth the rights, preferences and privileges of such units, including the respective conversion rights held by the Sellers and the Partnership. The Class C Amendment is expected to be substantially in the form attached to the Purchase Agreement as Exhibit F. | ||
| A registration rights agreement between the Sellers and the Partnership, pursuant to which the Partnership will grant to the Sellers certain registration rights, including rights to cause the Partnership to file with the Securities and Exchange Commission a shelf registration statement under the Securities Act of 1933, as amended (the Securities Act), with respect to resales of the Common Units to be issued upon conversion of the Class C Convertible Preferred Units to be acquired by the Sellers under the Purchase Agreement. The Registration Rights Agreement is to be negotiated between the parties and is expected to contain customary provisions regarding rights of indemnification between the parties with respect to certain applicable securities law liabilities. |
The foregoing summary of the Purchase Agreement does not purport to be complete, and is
qualified in its entirety by reference to the definitive Purchase Agreement filed as Exhibit 10.1
hereto and incorporated herein by reference.
Relationships
Entities controlled by affiliates of the Sellers own (i) the general partner of the
Partnership (the General Partner) and (ii) approximately 11.3 million of the Partnerships
outstanding Common Units and 7.1 million of the Partnerships subordinated units representing
limited partner interests, for an aggregate limited partner interest of approximately 52%. Certain
officers and directors of the Sellers or their affiliates serve as officers and/or directors of the
General Partner.
Each of the Sellers is part of a group of entities formed for the purpose of acquiring oil and
natural gas properties (the Fund). In connection with the initial public offering of the
Partnerships Common Units, the Fund
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and its affiliates contributed certain oil and natural gas
properties to the Partnership. The Partnership is a party to an omnibus agreement with the Fund
and its affiliates that governs the Partnerships relationship with the Fund and its affiliates
with respect to, among other items, business opportunities.
The Board of Directors of the General Partner approved the transaction based on a
recommendation from its conflicts committee, which consists entirely of directors meeting the New
York Stock Exchange listing standards for independence. The conflicts committee retained
independent legal and financial advisors to assist it in evaluating and negotiating the
transaction.
Item 3.02. Unregistered Sales of Equity Securities.
The information set forth under Item 1.01 above with respect to the potential issuance by the
Partnership of Class C Convertible Preferred Units pursuant to the Purchase Agreement is
incorporated herein by reference. At the closing of the purchase transaction described in Item
1.01 above, the Class C Convertible Preferred Units will be issued in reliance on an exemption from
registration under Section 4(2) of the Securities Act.
Item 7.01. Regulation FD Disclosure.
On September 12, 2011, the Partnership issued a press release announcing the execution of the
Purchase Agreement with the Sellers and its intention to engage in an investor conference call to
discuss the proposed acquisition. A copy of the press release announcing the proposed acquisition
by the Partnership from the Sellers is furnished as Exhibit 99.1 hereto and the slide presentation
to be presented in connection with such conference call is furnished as Exhibit 99.2 hereto.
The information being furnished pursuant to Item 7.01 of this Form 8-K and in Exhibits 99.1
and 99.2 shall not be deemed to be filed for the purposes of Section 18 of the Securities
Exchange Act of 1934 (the Exchange Act) or otherwise be subject to the liabilities of that
section, nor shall it be incorporated by reference into a filing under the or the Exchange Act,
except as shall be expressly set forth by specific reference in such a filing.
Item 9.01. Financial Statements and Exhibits.
(d) | Exhibits. |
Exhibit No. | Description | |
2.1*
|
Purchase and Sale Agreement, dated as of September 12, 2011, by and among QR Energy, LP, QRE Operating, LLC, Quantum Resources A1, LP, QAB Carried WI, LP, QAC Carried WI, LP, and Black Diamond Resources, LLC | |
99.1
|
QR Energy, LP Press Release dated September 12, 2011 | |
99.2
|
QR Energy, LP Investor Presentation |
* | Pursuant to the rules of the Commission, the remaining schedules and similar attachments to the agreement have not been filed herewith. The Partnership agrees to furnish supplementally a copy of any omitted schedule to the Commission upon request. |
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SIGNATURE
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.
QR Energy, LP | ||||
By: | QRE GP, LLC, its general partner | |||
By: | /s/ Gregory S. Roden
|
|||
Title: Vice President and General Counsel |
Dated September 12, 2011
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Exhibit Index
Exhibit No. | Description | |
2.1*
|
Purchase and Sale Agreement, dated as of September 12, 2011, by and among QR Energy, LP, QRE Operating, LLC, Quantum Resources A1, LP, QAB Carried WI, LP, QAC Carried WI, LP, and Black Diamond Resources, LLC | |
99.1
|
QR Energy, LP Press Release dated September 12, 2011 | |
99.2
|
QR Energy, LP Investor Presentation |
* | Pursuant to the rules of the Commission, the remaining schedules and similar attachments to the agreement have not been filed herewith. The Partnership agrees to furnish supplementally a copy of any omitted schedule to the Commission upon request. |