DIAMONDBACK ENERGY, INC. (NASDAQ:FANG) Files An 8-K Entry into a Material Definitive Agreement

Indenture

On December 20, 2016, Diamondback Energy, Inc. (Diamondback)
issued $500 million in aggregate principal amount of 5.375%
Senior Notes due 2025 (the Notes). The Notes were issued under an
indenture, dated as of December 20, 2016, among Diamondback, the
guarantors party thereto and Wells Fargo Bank, National
Association, as the trustee (the Indenture), to qualified
institutional buyers to Rule 144A under the Securities Act of
1933, as amended (the Securities Act), and to certain non-U.S.
persons in accordance with Regulation S under the Securities Act
(the Notes Offering). Diamondback intends to use the net proceeds
from the Notes Offering, together with the net proceeds from
Diamondbacks concurrent equity offering and cash on hand, to fund
the cash consideration of its previously announced pending
acquisition of certain oil and natural gas assets of Brigham
Resources Operating, LLC and Brigham Resources Midstream, LLC
(the Pending Acquisition). The Notes Offering was contemplated by
the purchase agreement among Diamondback, certain guarantors
party thereto and Credit Suisse Securities (USA) LLC, as
representative for the several initial purchasers named therein,
which purchase agreement was previously filed with the Securities
and Exchange Commission (the SEC). to the Indenture, interest on
the Notes accrues at a rate of 5.375% per annum on the
outstanding principal amount thereof from December 20, 2016,
payable semi-annually on May 31 and November 30 of each year,
commencing on May 31, 2017. The Notes will mature on May 31,
2025.

The Notes are Diamondbacks senior unsecured obligations and rank
equally in right of payment with all of Diamondbacks other senior
indebtedness and senior in right of payment to any of
Diamondbacks future subordinated indebtedness. All of
Diamondbacks existing and future subsidiaries that guarantee its
revolving credit facility or certain other debt and are
classified as restricted subsidiaries under the Indenture
guarantee the Notes. The Notes are not guaranteed by Viper Energy
Partners LP, Viper Energy Partners GP LLC, Viper Energy Partners
LLC or White Fang Energy LLC, which are classified as
unrestricted subsidiaries under the Indenture, and will not be
guaranteed by any of Diamondbacks future unrestricted
subsidiaries under the Indenture. The guarantees rank equally in
right of payment with all of the senior indebtedness of the
guarantors and senior in right of payment to any future
subordinated indebtedness of the guarantors. The Notes and the
guarantees are effectively subordinated to all of Diamondbacks
and the guarantors secured indebtedness (including all borrowings
and other obligations under Diamondbacks revolving credit
facility) to the extent of the value of the collateral securing
such indebtedness, and structurally subordinated to all
indebtedness and other liabilities of any of Diamondbacks
subsidiaries that do not guarantee the Notes.

Diamondback may on any one or more occasions redeem some or all
of the Notes at any time on or after May 31, 2020 at the
redemption prices listed in the Indenture. Prior to May 31, 2020,
Diamondback may on any one or more occasions redeem all or a
portion of the Notes at a price equal to 50% of the principal
amount of the Notes plus a make-whole premium and accrued and
unpaid interest to the redemption date. In addition, any time
prior to May 31, 2020, Diamondback may on any one or more
occasions redeem Notes in an aggregate principal amount not to
exceed 35% of the aggregate principal amount of the Notes issued
prior to such date at a redemption price of 105.375%, plus
accrued and unpaid interest to the redemption date, with an
amount equal to the net cash proceeds from certain equity
offerings.

If Diamondback experiences a change of control (as defined in the
Indenture), it will be required to make an offer to repurchase
the Notes at a price equal to 101% of the aggregate principal
amount thereof, plus accrued and unpaid interest, if any, to the
date of repurchase. If Diamondback sells certain assets and fails
to use the proceeds in a manner specified in the Indenture, it
will be required to use the remaining proceeds to make an offer
to repurchase the Notes at a price equal to 50% of the principal
amount thereof, plus accrued and unpaid interest, if any, to the
date of repurchase.

If the Pending Acquisition is not consummated by April 28, 2017
or, if prior to such date, the purchase and sale agreement
related to the Pending Acquisition is terminated prior to the
consummation of the Pending Acquisition, Diamondback will redeem
all of the Notes then outstanding. Additionally, if Diamondback
determines that the Pending Acquisition is reasonably likely not
to occur, it may redeem all of the Notes then outstanding. Any
such redemption will be at a redemption price equal to the
initial offer price of the Notes plus accrued and unpaid interest
to, but not including, the date of redemption.

The Indenture contains certain covenants that, subject to certain
exceptions and qualifications, among other things, limit
Diamondbacks ability and the ability of its restricted
subsidiaries to incur or guarantee additional indebtedness, make
certain investments, declare or pay dividends or make
distributions on capital stock, prepay subordinated indebtedness,
sell assets including capital stock of restricted subsidiaries,
agree to payment restrictions affecting Diamondbacks restricted
subsidiaries, consolidate, merge, sell or otherwise dispose of
all or substantially all of its assets, enter into transactions
with affiliates, incur liens, engage in business other than the
oil and gas business and designate certain of Diamondbacks
subsidiaries as unrestricted subsidiaries. Certain of these
covenants are subject to termination upon the occurrence of
certain events.

The preceding summary of the Indenture is qualified in its
entirety by reference to the full text of such agreement, a copy
of which is attached as Exhibit 4.1 to this Current Report on
Form 8-K and incorporated herein by reference.

Registration Rights Agreement

In connection with the issuance of the Notes, Diamondback and its
guarantors entered into a Registration Rights Agreement with
Credit Suisse Securities (USA) LLC, as representative for the
several initial purchasers named in Schedule A thereto, dated as
of December 20, 2016 (the Registration Rights Agreement), to
which Diamondback agreed to file a registration statement with
respect to an offer to exchange the Notes for a new issue of
substantially identical debt securities registered under the
Securities Act. Under the Registration Rights Agreement,
Diamondback also agreed to use its commercially reasonable
efforts to have the registration statement declared effective by
the SEC on or prior to the 360th day after the issue date of the
Notes and to keep the exchange offer open for not less than 30
days (or longer if required by applicable law). Diamondback may
be required to file a shelf registration statement to cover
resales of the Notes under certain circumstances. If Diamondback
fails to satisfy these obligations under the Registration Rights
Agreement, it agreed to pay additional interest to the holders of
the Notes as specified in the Registration Rights Agreement.

The preceding summary of the Registration Rights Agreement is
qualified in its entirety by reference to the full text of such
agreement, a copy of which is attached as Exhibit 4.2 to this
Current Report on Form 8-K and incorporated herein by reference.

Item 2.03. Creation of a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement of a
Registrant.

The information set forth in Item 1.01 above with respect to the
issuance of the Notes is incorporated herein by reference, as
applicable.

Item 3.03. Material Modification to Rights of Security Holders.

The information set forth in Item 1.01 above with respect to the
Indentures limitations on the payment of dividends, redemption of
stock or other distributions to Diamondbacks stockholders is
incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.