Halcon Resources, GeoResources To Merge, Pooling 52.8 MMBOE Proved

Transaction Type
Sellers
Buyers
Announce Date
Post Date
Close Date
Estimated Price
1BB
Description

To merge with company with assets primarily in the U.S. Southwest, Gulf Coast and the Williston Basin including 54,700 net acres in the Bakken shale trend of ND & MT & 23,600 net acres under lease in S TX Eagle Ford shale trend, gaining 6,100 BOE/d, 29.3 MMBOE proved.

Halcon Resources Corp., Houston, (Nasdaq: HK) has set its sights on GeoResources Inc., Houston, (Nasdaq: GEOI) which will merge with a subsidiary of Halcon in a deal valued at $1 billion in cash and stock. The deal closed Aug. 1, 2012.

Halcon will pay $20 in cash and issue 1.932 Halcon share per GeoResources share, representing a consideration to GeoResources stockholders of $37.97 per share based on the Halcon share closing price on April 24.

GeoResources focuses primarily on assets in the U.S. Southwest, Gulf Coast and the Williston Basin. Properties include 54,700 net acres in the Bakken shale trend of North Dakota and Montana and 23,600 net acres under lease in the Eagle Ford shale trend in South Texas.

Net production in fourth quarter 2011 averaged 6,100 barrels of oil equivalent per day. Proved reserves as of Jan. 1 were 29.3 million barrels equivalent.

Pro forma, Halcon will have proved reserves of 52.8 million barrels of oil equivalent (69% liquids) and net production of approximately 11,070 barrels of oil equivalent per day.

Halcon will continue to be led by Floyd C. Wilson as chairman, president and chief executive and Mark J. Mize as executive vice president, chief financial officer and treasurer. The stockholders of GeoResources are expected to own approximately 18% of the combined company's outstanding shares on a fully diluted basis.

Wilson says, “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. The combination will create a resource powerhouse with exposure to some of the most prolific unconventional liquids plays in the United States.”

GeoResources chairman, president and CEO Frank A. Lodzinski says, “We are excited about the opportunity to partner with a company that is well positioned to become a leading liquids-focused resource player. We have watched Floyd and his team create significant value for their shareholders over the years through their focused strategy, excellent technical capabilities and efficient operations. 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."

Barclays and Mitchell Energy Advisors are financial advisors to Halcon Resources. Wells Fargo Securities is financial advisor to GeoResources.