XTO Energy Inc. made an offer to acquire Hugoton Royalty Trust (OTCPK:HGTX.U) for $8 million.
April 31, 2020
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XTO Energy Inc. made an offer to acquire Hugoton Royalty Trust (OTCPK:HGTX.U) for $8 million on April 1, 2020. XTO Energy will acquire 40 million units of Hugoton at $0.2 per unit, net to the seller in cash. The offer will be funded from existing corporate cash balance. The offer is conditioned on the satisfaction or waiver of several conditions, including, among other things, there being validly tendered in accordance with the terms of the offer and not validly withdrawn, immediately prior to the expiration of the offer, a number of units that represents at least 80% of the units then outstanding as of the date and time at which the acceptance for payment of units pursuant to and subject to the offer occurs. If the minimum condition is not satisfied at the expiration date then XTO Energy will not accept for payment or pay for units pursuant to the offer. The offer is not conditioned on obtaining financing or funding.
The offer commenced on April 1, 2020 and will expire on April 28, 2020. As of April 28, 2020, approximately 5.85 million Units (excluding 2,451 Units with respect to which “Notices of Guaranteed Delivery” were delivered) had been validly tendered and not withdrawn, representing approximately 14.6% of the outstanding Units. As of May 12, 2020, approximately 6.77 million Units (excluding 21,000 Units with respect to which “Notices of Guaranteed Delivery” were delivered) had been validly tendered and not withdrawn, representing approximately 16.9% of the outstanding Units. As of April 29, 2020, XTO Energy has extended the offering period and the tender offer is now scheduled to expire on Tuesday May 12, 2020, unless the tender offer is further extended or earlier terminated. As on May 13, 2020, XTO Energy extended the expiration date of the Offer to May 26, 2020, unless the Offer is further extended or earlier terminated. The tender offer was extended to allow additional time, in light of the impacts of the COVID-19 pandemic.
Georgeson LLC acted as information agent and Computershare Trust Company N.A. acted as depository bank to XTO. George R. Bason Jr., William J. Chudd, David H. Schnabel, Paula A. Ryan and William A. Curran of Davis Polk & Wardwell LLP acted as legal advisor to XTO Energy Inc. in this transaction.
Hugoton Royalty Trust (the Trust) is an express trust, which is created pursuant to the Trust Indenture between XTO Energy Inc. (XTO Energy). XTO Energy conveyed to the Trust 80% net profits interests in certain predominantly natural gas producing working interest properties in Kansas, Oklahoma, and Wyoming under three separate conveyances. The net profits interests entitle the Trust to receive 80% of the net proceeds from the sale of oil and gas from the underlying properties. The net profits interests are the principal asset of the Trust. The Trust collects and distributes to unitholders monthly net profits income related to the 80% net profits interests. XTO Energy is a producer in the Ringwood, Northwest Okeene and Cheyenne Valley fields of Major County, the Northeast Cedardale field of Woodward County and the Elk City field of Beckham County. Argent Trust Company serves as the trustee of the Trust.
HUGOTON ROYALTY TRUST 
