Denver-based junior independent Delta Petroleum Corp. on Tuesday announced a stock merger agreement with long-time partner Castle Energy Corp., whose CEO died in August.
Castle, headquartered in King of Prussia, PA, already held a 32% stake in Delta, or about 6.7 million shares in the company, and Delta will issue another 1.8 million shares in the transaction. Castle sold all its direct operating assets in the United States in May 2002 to Delta in exchange for Delta shares, which were worth about $38.7 million at the time.
Under terms of the merger agreement, Castle shareholders will get 1.164 Delta shares for each Castle share, an offer worth $20.28 per Castle share as of Tuesday’s stock market close. On Tuesday, Delta’s shares closed at $17.42/share, while Castle closed at $19.77/share.
At the end of the second quarter, Castle held interest in about 166 oil and natural gas wells in western Pennsylvania. Its reserves at the end of September totaled 8.885 Bcf of gas. Delta’s core operations are located along the Gulf Coast and in the Wind River and Piceance basins of the Rocky Mountains. It also holds leases in the Columbia River Basin in eastern Washington.
Joseph L. Castle II, the company’s founder, chairman and CEO, died unexpectedly in August. Under Castle’s leadership, the company grew into a mid-sized public energy company which had exploration and production and natural gas marketing operations in fourteen states. Following his death, Sidney F. Wentz was named chairman and Richard E. Staedtler became president and CEO.
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