UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Amendment No. 1)
CURRENT REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Explanatory Note
As previously disclosed in its Current Report on Form 8-K filed with the Securities and Exchange Commission on November 6, 2023 (the “Original Form 8-K”), (i) on October 31, 2023, Vital Energy, Inc. (the “Company”) completed the acquisition of oil and gas properties from Maple Energy Holdings, LLC (“Maple”), (ii) on November 5, 2023 the Company completed the acquisition of oil and gas properties (the “Henry Acquisition”) from Henry Resources, LLC, Henry Energy LP and Moriah Henry Partners LLC (collectively, “Henry”), and (iii) on November 6, 2023, the Company completed the acquisition of oil and gas properties from Tall City Property Holdings III LLC and Tall City Operations III LLC.
This Amendment to Current Report on Form 8-K is being filed to amend and supplement the Original Form 8-K, the purpose of which is to disclose the acquisition of additional working interests in producing assets associated with the Henry Acquisition and provide the financial statements and pro forma financial information required by Item 9.01, which are filed as exhibits hereto and are incorporated herein by reference. All other items in the Original Form 8-K remain the same.
| Item 1.01 | Entry into a Material Definitive Agreement. |
On December 21, 2023, the Company entered into a purchase and sale agreement (the “GR PSA”) with Granite Ridge Holdings LLC, GREP IV-A Permian, LLC and GREP IV-B Permian, LLC (collectively, the “GR Parties”), pursuant to which the Company agreed to purchase (the “GR Acquisition”) additional working interests in producing assets associated with the Henry Acquisition for consideration comprising (i) approximately 0.6 million shares of the Company’s common stock, par value $0.01 per share (“Common Stock”), and (ii) approximately 0.8 million shares of the Company’s 2.0% Cumulative Mandatorily Convertible Series A Preferred Stock, par value $0.01 per share (the “Preferred Stock” and such shares of Common Stock and Preferred Stock, collectively, the “Share Consideration”) net of purchase price adjustments. The Company entered into the GR PSA as a result of the GR Parties’ exercise of their tag rights triggered by the execution of that certain Purchase and Sale Agreement by and among the Company and Henry on September 13, 2023.
The GR PSA contains customary representations and warranties, covenants and indemnification provisions for a transaction of this size and nature, provides the parties thereto with specified rights and obligations and allocates risk among them in a customary manner. The GR Acquisition closed on December 21, 2023. The foregoing description of the GR PSA does not purport to be complete and is qualified in its entirety by reference to the GR PSA filed as Exhibit 2.1 to this Current Report on Form 8-K and incorporated into this Item 1.01 by reference.
The GR PSA contains representations, warranties and other provisions that were made only for purposes of the GR PSA and as of specific dates and were solely for the benefit of the parties thereto. The GR PSA is a contractual document that establishes and governs the legal relations among the parties thereto and is not intended to be a source of factual, business or operational information about the Company or the GR Parties or the interests to be acquired from the GR Parties. The representations and warranties made by the Company and the GR Parties in the GR PSA may be (i) qualified by disclosure schedules containing information that modifies, qualifies or creates exceptions to such representations and warranties and (ii) subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Accordingly, investors and security holders should not rely on such representations and warranties as characterizations of the actual state of facts or circumstances.
The conversion of the shares of Preferred Stock into shares of Common Stock is conditioned on, and will occur mandatorily upon, the approval by the Company’s stockholders of the issuance of such shares under the New York Stock Exchange rules. The Company intends to obtain such approval at the next annual meeting of its stockholders in May 2024. The terms and conditions of the Preferred Stock to be issued as part of the Share Consideration are set forth in a Certificate of Designations, as amended by a Certificate of Amendment, copies of which were filed by the Company on Form 8-K on September 19, 2023 and November 6, 2023, respectively, and incorporated into this Item 1.01 by reference.
At the closing of the GR Acquisition, the Company entered into a registration rights agreement with Granite Ridge Vital, LLC (as designee for Granite Ridge Holdings LLC), GREP IV-A Permian, LLC and GREP IV-B Permian, LLC (collectively, the “GR Investors”) (the “GR Registration Rights Agreement”). Pursuant to the terms of the GR Registration Rights Agreement, the Company agreed to register under the Securities Act of 1933, as amended (the “Securities Act”), the resale of the shares of Common Stock issued as part of the Share Consideration and the shares of Common Stock issuable upon conversion of the shares of Preferred Stock issued as part of the Share Consideration and to grant the GR Investors certain rights to request and/or participate in underwritten offerings. The foregoing description of the GR Registration Rights Agreement does not purport to be complete and is qualified in its entirety by reference to the form of GR Registration Rights Agreement included as Exhibit C to the GR PSA filed as Exhibit 2.1 hereto and incorporated into this Item 1.01 by reference.
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At the closing of the GR Acquisition, the Company and the GR Investors entered into an investor agreement (the “GR Investor Agreement”). Pursuant to the terms of the GR Investor Agreement, the GR Investors are subject to customary transfer restrictions. The foregoing description of the GR Investor Agreement does not purport to be complete and is qualified in its entirety by reference to the form of GR Investor Agreement included as Exhibit E to the GR PSA filed as Exhibit 2.1 hereto and incorporated into this Item 1.01 by reference.
| Item 2.01 | Completion of Acquisition or Disposition of Assets |
The disclosure set forth in Item 1.01 is incorporated into this Item 2.01 by reference. On December 21, 2023, the Company consummated the GR Acquisition.
| Item 3.02 | Unregistered Sales of Equity Securities. |
On December 21, 2023, the Company issued 627,026 shares of Common Stock and 595,104 shares of Preferred Stock, constituting the purchase price in the GR Acquisition. The shares were issued in reliance on the exemption from registration requirements under the Securities Act pursuant to Section 4(a)(2) thereof. The Company relied upon representations, warranties, certifications and agreements of each of the Tag Sellers, as applicable, with respect to its members in support of the satisfaction of the conditions contained in Section 4(a)(2) of the Securities Act.
| Item 7.01 | Regulation FD Disclosure. |
On December 21, 2023, the Company issued a press release announcing the GR Acquisition. The press release is attached hereto as Exhibit 99.1 and is incorporated into this Item 7.01 by reference.
All statements in the press release, other than historical financial information, may be deemed to be forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance, and actual results or developments may differ materially from those in the forward-looking statements. See the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 and the Company’s other filings with the SEC for a discussion of other risks and uncertainties. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
In accordance with General Instruction B.2 of Form 8-K, the information furnished under this Item 7.01 of this Current Report on Form 8-K and the exhibit attached hereto is deemed to be “furnished” and shall not be deemed “filed” for the purpose of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, nor shall such information and exhibit be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act.
| Item 9.01 | Financial Statements and Exhibits. |
(a) Financial statements of business to be acquired.
GR Parties Financial Statements
The (i) unaudited statements of revenue and direct operating expenses of certain properties of Granite Ridge Resources, Inc. operated by Henry Energy LP for the nine-month periods ending September 30, 2023 and 2022, and the related notes thereto, and (ii) audited statements of revenues and direct operating expenses of certain properties of Granite Ridge Resources Inc. operated by Henry Energy LP for the years ended December 31, 2022 and 2021, and the related notes thereto, are filed as Exhibit 99.2 hereto and incorporated by reference herein.
The unaudited statements of revenues and direct operating expenses of certain properties of GREP IV-A Permian, LLC operated by Henry Energy LP for the nine-month period ended September 30, 2023, and the related notes thereto, are filed as Exhibit 99.3 hereto and incorporated by reference herein.
The unaudited statements of revenues and direct operating expenses of certain properties of GREP IV-B Permian, LLC operated by Henry Energy LP for the nine-month period ended September 30, 2023, and the related notes thereto, are filed as Exhibit 99.4 hereto and incorporated by reference herein.
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Maple Financial Statements
The unaudited financial statements of Maple, which comprise the balance sheet as of September 30, 2023, the related statements of operations, member equity, and cash flows for the nine-month periods ended September 30, 2023 and 2022, and the related notes to the financial statements, are filed as Exhibit 99.5 hereto and incorporated by reference herein.
Henry Financial Statements
The condensed consolidated unaudited interim financial statements of Henry Energy LP and its subsidiaries, which comprise the condensed consolidated unaudited balance sheet as of September 30, 2023, the related condensed consolidated unaudited statements of operations, changes in partner’s capital and cash flows for the nine-month periods ended September 30, 2023 and 2022, and the related notes to the condensed consolidated unaudited financial statements, are filed as Exhibit 99.6 hereto and incorporated by reference herein.
Tall City Financial Statements
The unaudited consolidated financial statements of Tall City Exploration III LLC and subsidiaries, which comprise the balance sheet as of September 30, 2023, the related statements of operations, changes in members' equity and cash flows for the nine-month periods ended September 30, 2023 and 2022, and the related notes to the consolidated financial statements, are filed as Exhibit 99.7 hereto and incorporated by reference herein.
(b) Pro forma financial information.
The unaudited pro forma condensed combined financial information of the Company, which comprises the balance sheet as of September 30, 2023, the related statements of operations for the nine-month period ended September 30, 2023 and year ended December 31, 2022, and the related notes thereto, is filed as Exhibit 99.8 hereto and incorporated by reference herein.
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(d) Exhibits.
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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.
| VITAL ENERGY, INC. | ||
| Date: December 22, 2023 | By: | /s/ Bryan J. Lemmerman |
| Bryan J. Lemmerman | ||
| Executive Vice President and Chief Financial Officer | ||