Subsequent Events (Notes)

6 Months Ended

Jun. 30, 2018

Subsequent Events [Abstract]

Subsequent Events [Text Block]

Subsequent Events

Partial redemption of senior notes

On July 12, 2018, the Company announced it will redeem $400 million, or 20%, of its outstanding $2.0 billion of 5% Senior Notes due 2022 on August 16, 2018. The redemption price will be equal to 101.667% of the principal amount called for redemption plus accrued and unpaid interest to the redemption date in accordance with the terms of the 2022 Notes and the related indenture under which the 2022 Notes were issued.

The aggregate of the principal amount, redemption premium, and accrued interest payable upon partial redemption of the 2022 Notes is expected to total approximately $415 million. The Company expects to record a pre-tax loss on extinguishment of debt related to the partial redemption of approximately $7 million, which will be reflected in third quarter 2018 results.

Formation of strategic relationship

On August 6, 2018, the Company executed definitive documents to form a strategic relationship with Franco-Nevada, subject to customary closing conditions, to acquire minerals in the SCOOP and STACK plays, primarily in areas operated by the Company. In accordance with the deal terms, Franco-Nevada has agreed to pay approximately $220 million for a stake in a newly-formed minerals subsidiary. The Company expects to receive the proceeds at closing in the fourth quarter of 2018. The amount to be received by the Company is subject to adjustment under the terms of the transaction documents.

In addition, the parties have also committed, subject to satisfaction of agreed upon development thresholds, to spend up to a combined $125 million per year over the next three years to acquire additional minerals through the newly-formed subsidiary. With a carry component on capital acquisition costs, the Company is to fund 20% of future mineral acquisitions. The Company will be entitled to receive between 25% and 50% of total revenues generated by the minerals subsidiary based upon performance relative to certain predetermined targets.