MID-CON ENERGY PARTNERS, LP Item 1.01. Entry Into a Material Definitive Agreement.
Merger Agreement
On
Upon the terms and subject to the conditions of the Merger Agreement, Mid-Con
will merge with and into Merger Sub (the "Merger"), with Merger Sub surviving
the Merger as a limited liability company and a wholly-owned, direct subsidiary
of the Contango. At the effective time of the Merger (the "Effective Time"),
each common unit representing limited partner interests in Mid-Con ("Mid-Con
Common Units") issued and outstanding immediately prior to the Effective Time
(other than Mid-Con Common Units held in Mid-Con's treasury or held by the
Mid-Con GP immediately prior to the Effective Time, which shall be canceled and
extinguished without any conversion thereof, and no consideration shall be
delivered in exchange therefor) will be converted automatically into the right
to receive 1.7500 shares of common stock, par value
Mid-Con'sboard of directors (the "Mid-Con Board"), by unanimous vote of the disinterested directors, at the recommendation of the duly appointed and constituted conflicts committee of the Mid-Con Board (the "Mid-Con Conflicts Committee"), has determined that the Merger Agreement and the transactions contemplated thereby are in the best interest of Mid-Con and its unitholders and has approved the Merger Agreement and the transactions contemplated thereby.
The obligation of the parties to complete the Merger is subject to customary
closing conditions, including, among others, (i) the receipt of the required
approvals from Contango's shareholders and Mid-Con's unitholders, (ii) the
absence of any law, order or injunction of a court or governmental entity of
competent jurisdiction prohibiting the consummation of the Merger, (iii) the
shares of Contango Common Stock issuable in connection with the Merger having
been approved for listing on the
The Merger Agreement contains customary representations and warranties of Contango and Mid-Con relating to their respective businesses, financial statements and public filings, in each case generally subject to customary materiality qualifiers. Additionally, the Merger Agreement provides for customary pre-closing covenants of Contango and Mid-Con, including covenants relating to conducting their respective businesses in the ordinary course and to refrain from taking certain actions without the other party's consent. The Merger Agreement also contains covenants of each of Contango and Mid-Con, subject in each case to certain exceptions, (i) to use reasonable best efforts to obtain the requisite shareholder approval or unitholder approval by, with respect to Contango, either written consent or convening a meeting of its shareholders for such purpose and, with respect to Mid-Con, written consent, (ii) not to solicit certain alternative acquisition proposals, engage in discussions or negotiations with respect to such proposals or provide non-public information in connection with such proposals and (iii) in the case of Contango, to recommend that its shareholders approve the issuance of Contango Common Stock in connection with the Merger and, in the case of Mid-Con, to recommend that its unitholders approve the Merger Agreement.
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Prior to, but not after, the approval of the Merger Agreement by Mid-Con's unitholders, the Mid-Con Conflicts Committee may withhold, withdraw, qualify or modify its recommendation that Mid-Con's unitholders approve the Merger Agreement as result of (i) a Mid-Con Designated Proposal or (ii) a Mid-Con Intervening Event (each as defined in the Merger Agreement), if the Mid-Con Conflicts Committee determines that the failure to make such a change of recommendation would result in a breach of its duties to the unaffiliated public unitholders under applicable law and Mid-Con's limited partnership agreement, subject to complying with certain notice and other specified conditions, including giving Contango the opportunity to propose revisions to the Merger Agreement during a match right period.
Prior to, but not after, the approval of the issuance of Contango Common Stock in connection with the Merger by Contango's shareholders, the Contango Board may withhold, withdraw, qualify or modify its recommendation that Contango's shareholders approve the issuance of Contango Common Stock in connection with the Merger as result of (i) a Contango Designated Proposal or (ii) a Contango Intervening Event (each as defined in the Merger Agreement) if the Contango Board determines that the failure to make such a change of recommendation would be inconsistent with the fiduciary duties owed by the Contango Board to Contango's shareholders under applicable law, subject to complying with certain notice and other specified conditions, including giving Mid-Con the opportunity to propose revisions to the terms of the Merger Agreement during a match right period.
The Merger Agreement contains certain termination rights for Mid-Con and
Contango, including the right for either Mid-Con or Contango to terminate the
Merger Agreement if the Merger has not been consummated within 180 days of the
date of the Merger Agreement. Upon termination of the Merger Agreement under
specified circumstances, including, among others, the termination by Contango in
the event of a change of recommendation by the Mid-Con Conflicts Committee,
Mid-Con would be required to pay Contango a termination fee of
Item 7.01. Regulation FD Disclosure.
On
Item 8.01. Other Events.
Contemporaneously with the execution of the Merger Agreement, Contango and a
Mid-Con subsidiary entered into a Purchase and Sale Agreement (the "Asset
Purchase Agreement"), with respect to the Mid-Con subsidiary's option to require
Contango to purchase certain assets of the subsidiary for cash consideration of
To the extent required, the information included in Item 7.01 of this Current Report on Form 8-K is incorporated into this Item 8.01.
Item 9.01. Financial Statements and Exhibits.
(d) List of Exhibits Exhibit No. Description 2.1 Agreement and Plan of Merger, dated as ofOctober 25, 2020 , by and among Contango Oil & Gas Company,Michael Merger Sub LLC ,Mid-Con Energy Partners, LP , andMid-Con Energy GP, LLC .* 10.1 Form of Voting and Support Agreement of Contango Oil & Gas Company Shareholders. 10.2 Form of Voting and Support Agreement ofMid-Con Energy Partners , LP Unitholders. 99.1 Joint Press Release datedOctober 26, 2020 .
* This filing excludes schedules pursuant to Item 601(b)(2) of Regulation S-K,
which the registrant agrees to furnish supplementally to the Securities and
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Additional Information and Where to Find It
This communication may be deemed to be solicitation material in respect of the
proposed merger (the "Proposed Merger"). The Proposed Merger will be submitted
to Contango's shareholders and Mid-Con's unitholders for their consideration.
Mid-Con and Contango intend to file a preliminary consent statement/proxy
statement/prospectus (the "Consent Statement/Proxy Statement/Prospectus") with
the
The Consent Statement/Proxy Statement/Prospectus, any amendments or supplements
thereto and other relevant materials, and any other documents filed by Mid-Con
or Contango with the
No Offer or Solicitation
This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities, or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.
Participants in the Solicitation
Mid-Con, Contango and certain of their respective executive officers, directors,
other members of management and employees may, under the rules of the
Cautionary Statement Regarding Forward-Looking Information
This communication contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements are
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based on Mid-Con's current expectations. The words and phrases "should", "could", "may", "will", "believe", "plan", "intend", "expect", "potential", "possible", "anticipate", "estimate", "forecast", "view", "efforts", "goal" and similar expressions identify forward-looking statements and express Mid-Con's expectations about future events. All statements, other than statements of historical facts, included in this communication that address activities, events or developments that Mid-Con expects, believes or anticipates will or may occur in the future are forward-looking statements. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond Mid-Con's or Contango's control. Consequently, actual future results could differ materially from Mid-Con's expectations due to a number of factors, including, but not limited to: the risk that Mid-Con's and Contango's businesses will not be integrated successfully; the risk that the cost savings, synergies and growth from the Proposed Merger may not be fully realized or may take longer to realize than expected; the diversion of management time on transaction-related issues; the effect of future regulatory or legislative actions on the companies or the industries in which they operate; the risk that the credit ratings of the combined company or its subsidiaries may be different from what the companies expect; the risk that a condition to closing of the Proposed Merger may not be satisfied; the length of time necessary to consummate the Proposed Merger, which may be longer than anticipated for various reasons; potential liability resulting from pending or future litigation; changes in the general economic environment, or social or political conditions, that could affect the businesses; the potential impact of the announcement or consummation of the Proposed Merger on relationships with customers, suppliers, competitors, management and other employees; the effect of this communication of the Proposed Merger on Mid-Con's unit price or Contango's stock price; the ability to hire and retain key personnel; reliance on and integration of information technology systems; the risks associated with assumptions the parties make in connection with the parties' critical accounting estimates and legal proceedings; the volatility of oil, gas and natural gas liquids (NGL) prices; uncertainties inherent in estimating oil, gas and NGL reserves; the impact of reduced demand for Mid-Con's and Contango's products and products made from them due to governmental and societal actions taken in response to the COVID-19 pandemic; the uncertainties, costs and risks involved in Mid-Con's and Contango's operations, including as a result of employee misconduct; natural disasters, pandemics, epidemics (including COVID-19 and any escalation or worsening thereof) or other public health conditions; counterparty credit risks; risks relating to Mid-Con's and Contango's indebtedness; risks related to Mid-Con's and Contango's hedging activities; competition for assets, materials, people and capital; regulatory restrictions, compliance costs and other risks relating to governmental regulation, including with respect to environmental matters; cyberattack risks; Mid-Con's and Contango's limited control over third parties who operate some of their respective oil and gas properties; midstream capacity constraints and potential interruptions in production; the extent to which insurance covers any losses Mid-Con and Contango may experience; risks related to investors attempting to effect change; general domestic and international economic and political conditions, including the impact of COVID-19; and changes in tax, environmental and other laws, including court rulings, applicable to Mid-Con's and Contango's business.
In addition to the foregoing, the COVID-19 pandemic and its related
repercussions have created significant volatility, uncertainty and turmoil in
the global economy and Mid-Con's and Contango's industry. This turmoil has
included an unprecedented supply-and-demand imbalance for oil and other
commodities, resulting in a swift and material decline in commodity prices in
early 2020. Mid-Con's and Contango's future actual results could differ
materially from the forward-looking statements in this communication due to the
COVID-19 pandemic and related impacts, including, by, among other things:
contributing to a sustained or further deterioration in commodity prices;
causing takeaway capacity constraints for production, resulting in further
production shut-ins and additional downward pressure on impacted regional
pricing differentials; limiting Mid-Con's and Contango's ability to access
sources of capital due to disruptions in financial markets; increasing the risk
of a downgrade from credit rating agencies; exacerbating counterparty credit
risks and the risk of supply chain interruptions; and increasing the risk of
operational disruptions due to social distancing measures and other changes to
business practices. Additional information concerning other risk factors is also
contained in Mid-Con's and Contango's most recently filed Annual Reports on Form
10-K, subsequent Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and
other
Many of these risks, uncertainties and assumptions are beyond Mid-Con's or Contango's ability to control or predict. Because of these risks, uncertainties and assumptions, you should not place undue reliance on these forward-looking statements. Nothing in this communication is intended, or is to be construed, as a profit forecast or to be interpreted to mean that earnings per share or unit of Mid-Con and Contango, as applicable, for the current or any future financial years or those of the combined company will necessarily match or exceed the historical published earnings per share or unit of Mid-Con and Contango, as applicable. Mid-Con does not give any assurance (1) that
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either Mid-Con or Contango will achieve their expectations, or (2) concerning any result or the timing thereof, in each case, with respect to the Proposed Merger or any regulatory action, administrative proceedings, government investigations, litigation, warning letters, consent decree, cost reductions, business strategies, earnings or revenue trends or future financial results.
All subsequent written and oral forward-looking statements concerning Mid-Con or the Proposed Merger, the combined company or other matters and attributable to Mid-Con or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements above. Mid-Con assumes no duty to update or revise their respective forward-looking statements based on new information, future events or otherwise.
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