Toreador Resources, ZaZa Complete Merger
Acquired company, creating entity with assets in Eagle Ford core and Eagle Ford/Woodbine (Eaglebine) resource plays in TX & Paris Basin in France with a current total of 423,000 net acres.
Toreador Resources Corp., Paris, (Nasdaq: TRGL; Paris: TOR) has completed its merger with privately held, Houston-based ZaZa Energy LLC, creating the new entity ZaZa Energy Corp.
The new company will be based in Houston with offices in Corpus Christi, Texas, and Paris, and now trades on Nasdaq as ZAZA. ZaZa shareholders received $50 million in notes or cash and 76.2 million shares of the new combined company, representing 75% of shares outstanding. Toreador shareholders received approximately 25.4 million shares, representing 25% of the new company.
The company also noted that the original ZaZa equity holders have entered agreements to sell approximately 8.3 million shares of ZaZa common stock in private resales to certain institutional investors, which will bring their pro forma ownership to approximately 67.9 million shares.
The combined portfolio comprises three areas—the Eagle Ford core and the Eagle Ford/Woodbine (Eaglebine) resource plays in Texas and the Paris Basin in France with a current total of 423,000 net acres. Both the Eagle Ford and Paris Basin businesses have strategic partnerships with subsidiaries of Hess Corp., New York (NYSE: HES).
In the Eagle Ford core, ZaZa holds 123,000 gross acres and the joint venture work program forecasts more than 280 wells drilled by the end of 2013. In the Eaglebine, leasing is under way to expand the existing 70,000 gross acres to more than 100,000 gross acres within the next 12 months. ZaZa is in discussions with potential JV partners for the Eaglebine acreage and plans to spud a first well by the first quarter of 2012.
In the Paris Basin, Toreador has a one-rig oil exploration drilling program targeting traditional reservoirs expected to commence by late 2011. The Liassic drilling program comprising six wells (without the use of hydraulic fracturing) is expected to commence by year-end pending final review of permits by the French Administration.
Net production in the Eagle Ford core and the Paris Basin is expected to exceed 1,100 barrels of oil equivalent per day by year-end 2011, increasing to 5,000 barrels equivalent per day by the end of 2013, which does not include any contribution from future drilling in the Eaglebine, Paris Basin conventional or Liassic. Toreador’s conventional proved reserves were 5.5 million barrels of oil as of year-end 2010.
ZaZa president and chief executive Craig McKenzie says, “We are pleased to have completed both the corporate combination and the new financing. ZaZa is poised to develop a unique asset portfolio of approximately 500,000 net acres in two world-class resource basins. Our goal is to provide immediate and sustainable production in the Eagle Ford and Eaglebine plays in Texas, while also progressing our position in the Paris Basin, France, where we have an attractive exposure to a very large oil resource.”
ZaZa’s new board includes five independent directors and four executive directors. The independent directors are: Travis Burris, Bernard de Combret, Adam Kroloff, Herbert Williamson and Fred Zeidman. The executive directors are: Todd Brooks, John Hearn, Gaston Kearby and Craig McKenzie. Fred Zeidman will be nonexecutive chairman. Charles Campise is chief financial officer.