By the OGJ Online Staff
HOUSTON, June 11 -- Westport Resources Corp., Denver, is buying Belco Oil & Gas Corp., New York, for $922 million, including the assumption of $588 million of debt, fair market value of the hedge portfolio, and convertible preferred stock.
The tax-free transaction provides Belco shareholders will receive 0.4125 shares of Westport common stock for each share of Belco common stock they own. Each Westport shareholder will receive one share of new Westport common stock for each share of Westport common stock they own.
The boards of directors of both companies unanimously approved the merger agreement and recommended shareholders approve the merger.
Shareholders of both companies holding sufficient shares to approve the merger have agreed to vote for merger. Subject to shareholder and regulatory approval, closing is expected to be completed in the third quarter.
Westport Chairman Donald Wolf will be chairman and CEO of the combined company.
After the merger is completed, Westport will increase its reserves by 726 bcf equivalent, an increase of 193% to a total of 1.2 tcf equivalent as of Dec. 31.
Daily production volumes from the combined companies in the first quarter indicate a 93% growth of 167 MMcfd equivalent, over Westport's 179 MMcfd equivalent.
Westport's position in the gas-prone Rocky Mountain basins will be expanded by 422,000 net acres of undeveloped leasehold in this region.
