Forest Oil Corp. and The Houston Exploration Co. (THX) stockholders separately have approved a merger agreement between the two companies (see Daily GPI, Jan. 9). On a pro forma basis, the acquisition will give Forest a total estimated proved reserves base of 2.0 Tcfe, of which about 69% would be classified as proved developed and approximately 70% would be natural gas. Denver-based Forest management and its board of directors will continue in their current positions, and it is anticipated that Forest will create a new business unit to be located in Houston. Under the terms of the agreement, THX stockholders will receive total consideration equal to 0.84 shares of Forest common stock and $26.25 in cash for each outstanding share of THX common stock, which represents $60.02/share to be received by THX stockholders based on the average closing price of Forest shares during the 10-day valuation period specified in the merger agreement. About 18.5 million of THX outstanding total shares, or 65.2%, voted to approve the transaction. Following the closing, Forest stockholders will own 73% of the combined company; THX stockholders will own 27%.

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