Halcón Resources to buy rival GeoResources for $973 mn
26 April 2012
US-based independent oil and gas explorer Halcón Resources Corp yesterday said that it will buy oil-and-gas driller GeoResources Inc, for around $973 million in cash and stock in order to enter the natural gas liquids business in the US.
Under the deal, Houston, Texas-based Halcon is offering $20 in cash and 1.932 shares of its stock for each GeoResources share, for a total consideration of $37.97 per share based on Halcon's closing price of $9.30 on 24 April.
The offer represents a 23-per cent premium to GeoResources closing price on 24 April. Post closing, GeoResources shareholders are expected to own about 18 per cent of the combined company's outstanding stock.
GeoResources, also based in Houston, is an independent oil and gas company that develops and acquire oil and gas reserves mainly in the Bakken and Three Forks formations in the Williston Basin, the Eagle Ford and the Austin Chalk trend in Texas.
Halcon, formerly RAM Energy Resources, is an independent oil and natural gas company engaged in the acquisition, development, exploitation, exploration and production of oil and natural gas properties, primarily in Texas, Louisiana and Oklahoma.
The acquisition will increase Halcon's estimated proved reserves by over 150 per cent to approximately 52.8 million barrels of oil equivalent, 69 per cent of which is liquids, and substantially increase its average net daily production by over 170 per cent to approximately 11,070 barrels of oil equivalent.
Floyd Wilson, chairman, president and CEO of Halcon Resources said, "The combination will create a resource powerhouse with exposure to some of the most prolific unconventional liquids plays in the US.''
"This transaction provides our shareholders with a combination of near-term liquidity and significant exposure to future upside. We believe our shareholders, employees and other stakeholders will prosper under the Halcon Resources banner and we are excited to move forward," said Frank Lodzinski, chairman, president and CEO of GeoResources.