Rosetta announces stock and debt offerings

Rosetta Resources to sell stock, hold debt offering to help pay for Permian Basin deal

Associated Press

HOUSTON (AP) -- Rosetta Resources Inc. said Monday that it plans to sell 7 million shares of common stock and hold a $700 million debt offering to help pay for an acquisition in the Permian Basin.

The Houston-based energy company said in March that it reached a deal to buy property located in Texas' Permian Basin from Comstock Resources Inc. for about $768 million, marking its entry into an area rich in oil and gas deposits. The deal includes more than 53,000 acres in Texas' Reeves and Gaines counties.

Rosetta said Monday that it will use part of the proceeds from the stock offering to pay for the deal and to repay debt. It has given underwriters an option to up to a million more shares to cover over-allotments. Any remaining proceeds will be used for general corporate purposes. The company said it will use all of its offering of senior unsecured notes for the deal.

Rosetta also said Monday that it has amended its senior credit facility, doubling its borrowing capability to $1.5 billion from $750 million, and extended its maturity date.

As a result of the Permian Basin deal, Rosetta expects total production for the first quarter will hit a company record of 47,000 barrels of equivalent per day, up 39 percent from the same period in 2012 and 6 percent higher than the prior quarter.

Rosetta shares fell $2.73, or 5.7 percent, to $45.20 in midday trading amid broad declines in commodities and stocks. The stock has traded between $32.37 and $54.61 in the past 52 weeks.

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