ELLORA ENERGY ANNOUNCES SALE OF COMPANY FOR $695M
DENVER, July 20, 2010 /PRNewswire via COMTEX/ --
Ellora Energy today announced the execution of a definitive agreement and plan of merger with an undisclosed buyer.
Under the terms of the agreement, Ellora Energy stockholders will receive base consideration of $695 million in cash, which after adjustment for certain items is expected to result in approximately $13.10-13.35/share on a projected fully diluted share count basis. The transaction is subject to escrow and customary closing conditions, including approval by Ellora's stockholders. Under the terms of the agreement, $35 million will be placed in escrow. Proxy materials are expected to be sent to stockholders within the next 20 days with a stockholder vote anticipated before the end of August.
The Company's year-end 2009 Proved Reserves were 61 Bcfe excluding the properties in Kansas and Colorado that were sold on February 1, 2010, and were 99% gas and 48% Proved Developed. For the quarter ending June 30, 2010, company production was 13.2 MMcfe/d, and the company holds interests in approximately 46,000 net acres in the Haynesville / Bossier plays. In addition, Ellora owns an approximate 100-mile pipeline system in the area. At June 30, 2010, Ellora's estimated net working capital was approximately $125 million and bank debt was $0.
The reserve estimates using SEC guidelines were prepared by the Company's independent reserve engineers, Ryder Scott Company. Mayer Brown LLP has advised the Company as to the legal aspects of the transaction. Tudor, Pickering, Holt & Co. Securities, Inc. has provided a fairness opinion in connection with the merger.
Ellora Energy today announced the execution of a definitive agreement and plan of merger with an undisclosed buyer.
Under the terms of the agreement, Ellora Energy stockholders will receive base consideration of $695 million in cash, which after adjustment for certain items is expected to result in approximately $13.10-13.35/share on a projected fully diluted share count basis. The transaction is subject to escrow and customary closing conditions, including approval by Ellora's stockholders. Under the terms of the agreement, $35 million will be placed in escrow. Proxy materials are expected to be sent to stockholders within the next 20 days with a stockholder vote anticipated before the end of August.
The Company's year-end 2009 Proved Reserves were 61 Bcfe excluding the properties in Kansas and Colorado that were sold on February 1, 2010, and were 99% gas and 48% Proved Developed. For the quarter ending June 30, 2010, company production was 13.2 MMcfe/d, and the company holds interests in approximately 46,000 net acres in the Haynesville / Bossier plays. In addition, Ellora owns an approximate 100-mile pipeline system in the area. At June 30, 2010, Ellora's estimated net working capital was approximately $125 million and bank debt was $0.
The reserve estimates using SEC guidelines were prepared by the Company's independent reserve engineers, Ryder Scott Company. Mayer Brown LLP has advised the Company as to the legal aspects of the transaction. Tudor, Pickering, Holt & Co. Securities, Inc. has provided a fairness opinion in connection with the merger.
Tags: $695M, ANNOUNCES, COMPANY, ELLORA, ENERGY, FOR, OF, SALE
Views: 669
Replies to This Discussion
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Permalink Reply by ALongview on -
You may be correct as to the size of the transaction and the money needed to pull it off. You can't just buy the land rights and not have the money to develop it. The 695 million price just went up to a billion in cost. HK did close on 1.3 billion of deals of their own so who knows how far a company will stretch?
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Permalink Reply by Skip Peel - Mineral Consultant on
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Alongview, any idea how much of this 46,000 acres located on your side of the pond is HBP and how much may need drilling in the next few years? I'd like very much for the buyer to be a company like EXCO or Questar that might have a desire to develop more fully in a shorter time frame than an XTO/XOM, or an Encana or Chesapeake for that matter.
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Permalink Reply by ALongview on
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Skip, I have searched for that info with no luck. I would think that with production of 13 MMcfe/d that it isn't enough to justify the purchase without immediate development (unless of course you are an xto/xom type outfit). Anyone else would need to generate cash almost immediately to service any debt taken on to finance the deal. 13 MMcfe/d is like having one great Haynesville well but with a cost of half a billion dollars.
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Permalink Reply by Skip Peel - Mineral Consultant on
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Good point. An XTO/XOM acquisition certainly reinforces the prospective nature of E. TX. minerals but may not portend a lot of near term drilling. How's the infrastructure in the area of the Ellora leasehold?
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Permalink Reply by Skip Peel - Mineral Consultant on
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No announcement of the purchaser has been forthcoming.
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Permalink Reply by Mark on
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Oh its been announced weeks ago. XTO is the purchaser. I've already received paperwork from XTO about the change over from Ellora and their entities to XTO and how to go about contacting them for payments and/or vendor invoice submissions.
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Permalink Reply by smj on
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I talked to Ellora last week regarding my family holdings in Shelby county. We have a well listed in the group named earlier in this discussion...No buyer name disclosed yet, however, like Mark, legal paperwork is in process now....I was led to believe that we would be seeing fatter royalty checks in future, due to new operators planning to update old wells and drill new wells in updated methods...good news for my family and future drilling mineral owners...thanks smj
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Permalink Reply by bdonn on
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Confirmed, the buyer is Exxon/XTO. Found out about two days after the announcement. They purchased for unconventional Haynesville deep rights in and around the Huxley Field in Shelby County.
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