logo
Plus   Neg
Share
Email

GeoResources To Merge Into Halcón Resources In $1 Bln Cash, Stock Deal

Independent oil and gas company GeoResources, Inc. (GEOI) agreed Wednesday to merge into its wholly-owned subsidiary of Halcon Resources Corp. (HK) in a cash and stock deal valued at $1.0 billion. The deal, which has the unanimous approval of both the companies boards, is expected to close in the third quarter of 2012.

Meanwhile, the deal is subject to the approval of the stockholders of both companies, as well as other customary approvals, including approval of listing of the Halcon Resources shares that will be issued in the merger on the New York Stock Exchange.

"This transaction represents a significant opportunity for the shareholders of both companies to benefit from the combined strengths of Halcon Resources and GeoResources and is immediately accretive to discretionary cash flow, production and reserves on a per share basis," Halcon Chairman, President and CEO Floyd Wilson said in a statement.

The combined entity will become a resource powerhouse with exposure to some of the most prolific unconventional liquids plays in the U.S.

The deal will see Halcon increase its estimated proved reserves by more than 150 percent to about 52.8 million barrels of oil equivalent or boe. It will also boost Halcon's average net daily production by more than 170 percent to about 11,070 boe.

Under the deal, GeoResources stockholders will receive $20.00 in cash and 1.932 shares of Halcon Resources common stock for each share of GeoResources common stock that they hold. This will imply a total consideration of $37.97 per share, representing a 23 percent premium to Halcon's closing price of $30.77 on Tuesday.

Following the announcement, GeoResources shares are surging $5.54 or 18.00 percent to $36.31 in a bid to reach the offer price. Halcon shares are also up $0.73 or 7.85 percent at $10.03.

Frank Lodzinski, Chairman, President and CEO of GeoResources stated, "We are excited about the opportunity to partner with a company that is well positioned to become a leading liquids-focused resource player.

Following the closure of the deal, Halcon will continue to be led by Wilson, and Halcon's Executive Vice President, CFO and Treasurer Mark Mize. At that time, the GeoResources stockholders are expected to own about 18 percent of the combined entity.

"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." Lodzinski added.

by RTTNews Staff Writer

For comments and feedback: editorial@rttnews.com

Business News

Editors Pick
Down the line, GE has transformed from a too-big-to-fail conglomerate to a too-big-for-success albatross. The company has admitted to being too-much focused on EPS and operating profit, and not paying enough attention to cash. However, GE is certainly learning lessons from its past and refocusing its strategies to stage a comeback to its Camelot days, the key catalysts being... Industrial conglomerate General Electric Co., one of the original components of the Dow Jones Industrial Average, has been replaced by Walgreens Boots Alliance Inc. in the blue-chip index. The change comes into effect prior to the open of trading on Tuesday, June 26. The 122-year-old Dow Jones Industrial Average, or simply the Dow, is a stock market index with 30 component companies. A $716 billion defense policy bill easily cleared the Senate on Monday, although the legislation must still be reconciled with the version previously approved by the House. The Senate voted 85 to 10 in favor of the National Defense Authorization Act, which authorizes U.S. military spending for fiscal 2019.
Follow RTT