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Subsequent Events
 12 Months Ended
Dec. 31, 2022
Subsequent Events [Abstract]  
Subsequent Events Subsequent Events
Dividend Declaration
On January 11, 2023, the Board of Directors of the Company declared a cash dividend of $0.34 per share of common stock payable on February 8, 2023 to its shareholders of record at the close of business on January 25, 2023.
Entry into Purchase and Sales Agreement
On February 22, 2023, the Company entered into a purchase and sale agreement (the "Purchase Agreement") to acquire interests in oil and natural gas leases and related property with Pecos Oil & Gas, LLC (“Pecos”) for a purchase price of approximately $330 million, subject to customary closing adjustments, (the “New Mexico Acquisition”). The oil and natural gas leases are located in the Yeso trend of the Permian Basin in Eddy County of New Mexico. On February 22, 2023, in connection with the Purchase Agreement, REP deposited $33 million in cash into a third party escrow account, which will be credited against the purchase price upon closing.
The New Mexico Acquisition is expected to close early in the second quarter of 2023, subject to the satisfaction of several closing considerations, including but not limited to, an amendment to the revolving credit facility and a commitment letter dated February 22, 2023 with Truist Bank and the other participating lenders, it is anticipated that up to $130 million of the purchase price will be funded by amending REP’s existing credit facility to increase the total borrowing base to $475 million from $225 million. The commitment letter and related amendment to the credit facility and increase to the borrowing base are subject to a number of conditions, including the preparation, execution and delivery of loan amendments.
In connection with the Purchase Agreement, the Company entered into a commitment letter dated February 22, 2023 (the "Commitment Letter") with EOC Partners Advisors L.P. and/or one of its affiliates (collectively, “EOC”) in which EOC and/or one of its affiliates will purchase $200 million of unsecured senior notes (“Senior Notes”) from the Company on the closing date of the New Mexico Acquisition. The proceeds of the Senior Notes will be used to fund a portion of the purchase price of the New Mexico Acquisition and to pay fees, costs and expenses related to the New Mexico Acquisition and the related financing transactions. The Senior Notes will bear interest at 10.5% annually and will mature five years after issuance. The Senior Notes contain certain mandatory and voluntary prepayment conditions. Additionally, the Senior Notes have various financial covenants. The funding of the Senior Notes is contingent on the satisfaction or waiver of certain conditions set forth in the Commitment Letter.
Derivative Contracts
As discussed above, the Company entered into the Purchase Agreement to acquire assets in Eddy County New Mexico. In connection with the Purchase Agreement, the Company entered into the Commitment Letter described above for the issuance of $200 million of Senior Notes upon closing of the New Mexico Acquisition, which is subject to the terms and conditions set forth therein. The Senior Notes contain certain hedging requirements. The Company has therefore added to its open derivative contracts in anticipation of an early second quarter close on the New Mexico Acquisition and issuance of Senior Notes. The
following table summarizes the Company's open derivative positions as of March 3, 2023, related to oil and natural gas production:
Weighted Average Price
Period(1)
Notional VolumeFixedPutCall
($ per unit)
Oil Swaps (Bbl)
Q1 2023225,000 $53.65 $— $— 
Q2 2023315,000 $62.78 $— $— 
Q3 2023216,000 $63.04 $— $— 
Q4 2023189,000 $62.51 $— $— 
2024240,000 $71.60 $— $— 
Oil Collars (Bbl)
Q1 2023210,000 $— $70.95 $89.96 
Q2 2023300,000 $— $71.50 $88.98 
Q3 2023330,000 $— $68.64 $88.85 
Q4 2023330,000 $— $68.64 $88.85 
20241,293,000 $— $61.02 $86.39 
2025315,000 $— $60.00 $77.98 
Natural Gas Swaps (MMBtu)
Q1 2023— $— $— $— 
Q2 2023450,000 $2.60 $— $— 
Q3 2023450,000 $2.60 $— $— 
Q4 2023400,000 $3.23 $— $— 
20241,500,000 $3.43 $— $— 
2025375,000 $4.05 $— $— 
Natural Gas Collars (MMBtu)
Q1 2023— $— $— $— 
Q2 2023300,000 $— $2.55 $3.20 
Q3 2023300,000 $— $2.55 $3.20 
Q4 2023300,000 $— $3.12 $4.07 
20241,065,000 $— $3.19 $4.14 
2025255,000 $— $3.65 $4.95 
Oil Basis (Bbl)
Q1 2023240,000 $1.28 $— $— 
Q2 2023360,000 $1.28 $— $— 
Q3 2023360,000 $1.28 $— $— 
Q4 2023360,000 $1.28 $— $— 
2024960,000 $0.87 $— $— 
___________________
(1)Q1 2023 derivative positions shown include January and February 2023 contracts, some of which have settled as of March 3, 2023.