DENVER, March 07, 2016 (GLOBE NEWSWIRE) -- PDC Energy, Inc. (“PDC” or the “Company”) (PDCE) today announced that it intends to offer for sale 4,000,000 shares of its common stock in an underwritten public offering. The Company has granted the underwriters an option for 30 days to purchase up to an additional 600,000 shares of the Company’s common stock to cover over-allotments, if any. The net proceeds from this offering will be used to repay the principal amounts owed upon the maturity of the Company’s 3.25% convertible senior notes due in May 2016 and for general corporate purposes, which may include repaying amounts borrowed under the Company’s revolving credit facility.
BofA Merrill Lynch and J.P. Morgan are acting as joint book-running managers for the offering.
Equity offerings like this always seem to get a negative response by the market and I've never understood that. These are pre-arranged sales and the book-runners take a very hard look at the company before setting the price. The cash strengthens the balance sheet and reduces interest expense. 9 times out of 10 the share price moves higher after the initial dip.