?Stone Energy Corp., Lafayette, La., (NYSE: SGY) plans to acquire Bois d’Arc Energy Inc., Houston, (NYSE: BDE) in a merger for approximately $1.8 billion in stock and cash.
Stone will pay $13.65 in cash and 0.165 share per Bois d’Arc share for a total value of $24.85 per Bois d’Arc share. Following the sale, Stone stockholders will own approximately 72% of the combined company and Bois d’Arc stockholders will own approximately 28%. Comstock Resources Inc., Frisco, Texas, (NYSE: CRK) which has a 49% stake in Bois d’Arc, will receive $440 million in cash and 5,317,069 Stone shares. Comstock will have a 13% stake in Stone Energy upon closing, which is expected in the third quarter, and has agreed to a one-year lock-up.
Bois d’Arc’s assets include estimated proved reserves of 398 billion cu. ft. equivalent (63% gas; 37% proved developed) as of year-end 2007, 98% operated. Stone’s internal estimates place Bois d’Arc proved reserves at 335 billion equivalent (57% gas) with another 127 billion probable as estimated by Bois d’Arc.
Daily production in 2007 averaged 88 million cu. ft. of gas and 4,578 bbl. of oil (116 million equivalent).
Bois d’Arc’s properties are in the shallow Gulf of Mexico in federal and Louisiana state waters. The company has interests in 145 producing wells (108.3 net; 96% operated). Total gross acreage is 389,000 (327,000 net) with 238,000 developed (177,000 net), of which 54% of total net acres are held by production.
Pro forma, Stone will have more than 738 billion cu. ft. equivalent of estimated proved reserves (275 billion probable; 55% gas) and produce more than 300 million cu. ft. per day with a leasehold position of 800,000 net undeveloped acres.
Stone will pay approximately $936 million in cash, funded from cash on hand and a proposed new $700-million credit facility underwritten by Bank of America NA. It will issue approximately 11.3 million shares valued at $768 million as part of the deal. Stone expects to hedge up to 100% of Bois d’Arc’s production, representing about one-third of total Stone production post-merger. Its debt-to-capitalization ratio will be approximately 38%.
Stone’s cash on hand includes proceeds from its 2007 sale of Rockies assets to Newfield Exploration Co., Houston, (NYSE: NFX) for $578 million. Stone chief executive David Welch says, “Bois d’Arc is an outstanding fit with Stone, given the complementary asset bases, strategies and skillsets of the two companies.” Welch will continue as chief executive.
Bois d’Arc chief executive Gary Blackie says, “Stone has the cash flow as well as the depth of personnel and the infrastructure in place to effectively capture the full value of Bois d’Arc’s extensive prospect inventory.”
Comstock chief executive Jay Allison says, “Stone has made significant strides in positioning itself as a leader in the Gulf of Mexico and the Bois d’Arc team has done an outstanding job of creating value since Bois d’Arc’s inception.”
Tudor, Pickering, Holt & Co. Securities Inc. is advisor to Stone. Scotia ?Waterous (USA) Inc. and Raymond James & Associates Inc. are advisors to Bois d’Arc.

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