2008-08-30-2008-04-30-2008-08-29

Bought company, gaining 335 Bcfe, 116 MMcfe/d on GOM OCS.

Stone Energy Corp., Lafayette, La., (NYSE: SGY) has closed its acquisition of Bois d'Arc Energy Inc., Houston, (NYSE: BDE) for approximately $1.5 billion. Stone paid $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. Stone paid approximately $935 million in cash and issued approximately 11.3 million shares. Stone stockholders own approximately 72% of the combined company and Bois d'Arc stockholders own approximately 28%. Comstock Resources Inc., Frisco, Texas, (NYSE: CRK) which holds a 49% stake in Bois d'Arc, received $440 million in cash and 5,317,069 shares of Stone. Bois d'Arc assets included estimated proved reserves of 398 billion cubic feet equivalent (63% gas; 37% proved developed) as of year-end 2007 and is 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 for 2007 averaged 88 million cubic feet of gas and 4,578 barrels of oil (116 million equivalent). Bois d'Arc properties are in the outer continental shelf of the Gulf of Mexico in water depths of up to 75 feet in both federal and Louisiana state waters. The company holds 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. Stone now has more than 738 billion cubic feet equivalent of estimated proved reserves (275 billion probable; 55% gas) and produces more than 300 million cubic feet per day with a leasehold position of 800,000 net undeveloped acres. Stone funded the cash portion of the acquisition with cash on hand of approximately $510 million and borrowings of $425 million under its newly amended and restated $700 million credit facility underwritten by Bank of America NA. Stone previously reported it expected to hedge up to 100% of Bois d'Arc production, representing about one-third of total Stone production combined. Its debt-to-capitalization ratio is approximately 38%. Stone used proceeds from the sale of Rockies assets to Newfield Exploration Co., Houston, (NYSE: NFX) for $578 million in 2007. Stone chief executive David Welch says, "The acquisition of Bois d'Arc will provide Stone with a substantial inventory of exploration and exploitation projects. We expect to move quickly to absorb operations and to accelerate our combined drilling program." He says combined daily production is expected to be 290 million to 320 million cubic feet equivalent in the fourth quarter. Former Bois d'Arc chief executive Gary Blackie and his exploration group will generate prospects in the Gulf of Mexico via a participation agreement with Bois d'Arc Exploration LLC. Welch will continue as chief executive of the combined company. Comstock chief executive M. Jay Allison says, "We are very excited about this combination and are enthusiastic about our 13% ownership interest in Stone Energy. In combination with Bois d'Arc, Stone is now one of the largest Gulf of Mexico focused operating companies. The completion of this transaction allows Comstock to focus entirely on growing its onshore operations and provides additional capital to develop our leasehold position in the emerging Haynesville shale gas play in East Texas and North Louisiana." Stone will remain headquartered in Lafayette, La. Tudor, Pickering, Holt & Co. was advisor to Stone. Scotia Waterous (USA) Inc. and Raymond James & Associates Inc. were advisors to Bois d'Arc.