Use of Proceeds
We will receive net proceeds of approximately $113.0 million from the sale of
the common stock offered by us in this offering after deducting estimated
offering expenses and underwriting discounts and commissions of approximately
$11.7 million. We will not receive any of the proceeds from the sale of
shares of our common stock by the selling stockholders, including pursuant to
the underwriters’ option to purchase additional shares.
We intend to use the net proceeds we receive from this offering to repay all
outstanding indebtedness under our new senior secured credit facility entered
into in April 2011, approximately $105.0 million of which was outstanding on
June 30, 2011. We intend to use any remaining net proceeds to partially fund
the purchase price of our on-order hydraulic fracturing fleets.
The following table illustrates our use of proceeds from this offering:
Sources of Cash (In millions) Uses of Cash (In millions)
Net proceeds to us Repayment of borrowings under
from this offering $ 113.0 our credit facility $ 105.0
Partial payment of our on-order
hydraulic fracturing fleets 8.0
Total $ 113.0 Total $ 113.0
As of June 30, 2011, we had approximately $95.0 million available for
borrowing under our new credit facility. Indebtedness under our credit
facility was incurred primarily to repay $49.6 million of indebtedness under
our previous revolving credit facility and $29.9 million of indebtedness,
accrued interest and early termination penalties under our subordinated term
loan and to fund $25.0 million of the purchase price for our acquisition of
Total. Indebtedness under our previous revolving credit facility and our
subordinated term loan, which were terminated in connection with the
repayment, were incurred primarily to fund the acquisitions of Fleet 3 and
Fleet 4. Our new credit facility will mature on April 19, 2016. As of June
30, 2011, the interest rate under our credit facility was 2.8%.
Affiliates of certain of the underwriters are lenders under our credit
facility and, accordingly, will receive a portion of the proceeds from this
We estimate that the selling stockholders will receive net proceeds of
approximately $194.2 million from the sale of 7,200,000 shares of our common
stock in this offering after deducting underwriting discounts and commissions.
If the underwriters’ option to purchase additional shares is exercised in
full, we estimate that the selling stockholders will receive net proceeds
of approximately $240.7 million. We will pay all expenses related to this
offering, other than underwriting discounts and commissions related to the
shares sold by the selling stockholders.