GeoResources, Inc. Announces Merger Agreement with Southern Bay Oil & Gas and Chandler Energy, Creating A Larger Company With As
14 Setembro 2006 - 10:42AM
PR Newswire (US)
WILLISTON, N.D. and HOUSTON, Sept. 14 /PRNewswire-FirstCall/ --
GeoResources, Inc., (NASDAQ:GEOI), today announced that its Board
of Directors approved a definitive merger agreement with Southern
Bay Oil & Gas, L.P. and Chandler Energy, LLC. In the proposed
transaction, the total purchase price is approximately $78 million
and will be paid through the issuance of 8,263,000 shares of
GeoResources common stock for 100% of the partnership interests of
Southern Bay Oil & Gas, L.P. and 1,931,000 shares of
GeoResources common stock for 100% of the outstanding membership
interests of Chandler Energy, LLC. (Logo:
http://www.newscom.com/cgi-bin/prnh/20051114/CGM073LOGO ) The
proposed transactions would create a combined entity with assets in
the Williston Basin, the Rocky Mountains and the Gulf Coast. Pro
forma reserves for the proposed combined entity at June 30, 2006
were approximately 8.1 million barrels of oil equivalent (BOE), 74%
proved developed, with daily production of approximately 1,500 BOE.
The terms of the transactions also involve Southern Bay and
Chandler committing additional capital contributions of
approximately $20 million to finance initial expansion plans of the
combined entity, as well as offers by GeoResources to purchase
certain working interests in one of Chandler's Colorado projects.
Subject to completion of due diligence and approval of the
combination by the shareholders of GeoResources, the partners of
Southern Bay and the members of Chandler Energy, the companies
believe the transactions could close in late 2006 or during the
first quarter of 2007. No assurances can be made that the
transactions will be completed within these estimated periods of
time. Upon closing, Frank A. Lodzinski, President and Chief
Executive Officer of Southern Bay Oil & Gas, L.P., would assume
the role of Chief Executive Officer, President and Director of
GeoResources; Collis P. Chandler, III, President of Denver-based
Chandler Energy, LLC, would serve as Executive Vice President and
Director; and Jeffrey P. Vickers, President of GeoResources, would
serve as Vice President, Williston Basin Exploration and
Development. The composition of the GeoResources' board of
directors, including to-be-named directors, will meet the
independence requirements of NASDAQ regarding directors, with four
directors to be named by Southern Bay, two directors to be named by
Chandler and one director to be named by GeoResources. Upon
completion of the transactions, the parties anticipate that
GeoResources' headquarters would relocate to Houston, and the
Company will have operating offices in Williston and Denver.
Management Comments Jeffrey P. Vickers, President of GeoResources,
said: "This transaction will benefit our current shareholders by
diversifying our holdings, creating a larger entity with more
access to capital and a larger inventory of development
opportunities. The Southern Bay properties will add both oil and
gas production and reserves on the Texas and Louisiana Gulf Coasts.
The Chandler properties will add primarily gas production and
reserves in Rocky Mountains. These transactions give GeoResources a
more balanced reserve base with 38% natural gas, a geographically
diverse asset base and the experienced personnel to help us exploit
our opportunities." Frank A. Lodzinski, President and Chief
Executive Officer of Southern Bay Oil & Gas, L.P. said: "This
is a great opportunity to combine our Gulf Coast assets with
long-lived Rocky Mountain oil and gas assets and provide us
exposure to a new core area. The larger entity will be better
positioned to increase its assets through the acquisition of
producing properties and exploitation of its prospects with the
experienced people we will have in each of our core areas." About
GeoResources, Inc. GeoResources, Inc., a Williston, North
Dakota-based natural resources company, is engaged primarily in oil
and gas exploration and production and oil and gas drilling. For
more information visit the company's website at
http://www.geoi.net/ . About Southern Bay Oil & Gas L.P.
Southern Bay Oil & Gas, L.P. is headquartered in Houston,
Texas. Southern Bay and its subsidiaries own and operate producing
oil and gas properties on the Texas and Louisiana Gulf Coast, and
in the Permian Basin in Texas. Southern Bay and its affiliates also
conduct oil and gas exploration operations in these geographic
areas. For more information visit the company's website at
http://www.southernbayenergy.com/ . About Chandler Energy, LLC
Chandler Energy, LLC is a Denver, Colorado based oil and gas
exploration and production company with operations in the Rocky
Mountains and Michigan. Forward-Looking Statements Information
herein contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995, which can be
identified by words such as "may," "will," "expect," "anticipate,"
"estimate" or "continue," or comparable words. GeoResources cannot
make any assurances that the agreement referenced in this release
will close. In addition, all statements other than statements of
historical facts that address activities that the company expects
or anticipates will or may occur in the future are forward-looking
statements. Readers are encouraged to read the SEC reports of the
Company, particularly its Form 10-KSB for the Fiscal Year Ended
December 31, 2005, for meaningful cautionary language disclosure.
http://www.newscom.com/cgi-bin/prnh/20051114/CGM073LOGO
http://photoarchive.ap.org/ DATASOURCE: GeoResources, Inc. CONTACT:
Cathy Kruse of GeoResources, Inc., +1-701-572-2020, Web site:
http://www.georesources.net/ http://www.southernbayenergy.com/
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