Form 4: EnCap Partners Reduces Stake in Permian Resources Corp Through Public Offering

EnCap Partners and affiliated entities sold 9,000,000 shares of Permian Resources Corp Class A Common Stock at $15.71 per share in an underwritten public offering, while also converting OpCo Units into Class A Common Stock.

Summary

• EnCap Partners GP, LLC, along with affiliated entities including EnCap Energy Capital Funds VIII, IX, and XI, and Bold Energy Holdings, LLC, filed a Form 4 detailing changes in beneficial ownership of Permian Resources Corp [PR].
• On March 6, 2024, Bold Energy Holdings, LLC, EnCap Energy Capital Fund VIII, L.P. and EnCap Energy Capital Fund XI, L.P. sold 9,000,000 shares of Class A Common Stock at a price of $15.71 per share in an underwritten public offering.
• Additionally, 5,449,577 OpCo Units were converted into Class A Common Stock.
• Following these transactions, EnCap entities continue to hold significant positions in Permian Resources Corp, including Class A Common Stock and Class C Common Stock along with corresponding OpCo Units.

Sentiment

Score: 6

Explanation: The sentiment is neutral. While EnCap reduced its stake, it still maintains a significant holding. The transaction itself is a standard financial maneuver.

Negatives

• EnCap Partners and affiliated entities reduced their stake in Permian Resources Corp through the sale of 9,000,000 shares.

Industry Context

This transaction reflects ongoing activity in the energy sector, where private equity firms like EnCap Partners periodically adjust their holdings in portfolio companies through public offerings and other market transactions.

Comparison to Industry Standards

• Similar transactions are common among private equity firms in the oil and gas industry, such as Quantum Energy Partners and Riverstone Holdings, who often monetize their investments through public offerings or secondary sales after a period of growth and value creation.
• The sale price of $15.71 per share is within the typical range observed in recent energy sector offerings, although the specific valuation depends on factors such as the company's growth prospects, reserves, and market conditions.

Stakeholder Impact

• The sale of shares may have a short-term impact on the stock price of Permian Resources Corp.
• The continued involvement of EnCap Partners suggests ongoing support for the company's strategy and operations.

Key Dates