Merge

Magnum Hunter Resources Inc., which announced in January that it would merge with Cimarex Energy Co., reported Tuesday that its U.S.-based oil and natural gas production jumped 21% in the fourth quarter and 10% overall in 2004. Production volumes totaled 22.6 Bcfe, or 246.0 MMcfe/d in 4Q2004, with natural gas accounting for 71% of total equivalent production.

In response to the California Public Utilities Commission’s natural gas supply rulemaking last September, Sempra Energy’s two utilities asked the CPUC to approve a merger of the gas transmission charges for pipeline transportation on the utilities’ in-state backbone transmission systems. Integrating the now separate charges by the combined utilities would result in lower charges to retail gas transportation customers, the utilities contend.

In a filing earlier in the month in response to the California Public Utilities Commission’s natural gas supply rulemaking last September, Sempra Energy’s two utilities asked the CPUC to approve a merger of the gas transmission charges for pipeline transportation on the utilities’ in-state backbone transmission systems. Integrating the now separate charges by the combined utilities would result in lower charges to retail gas transportation customers, the utilities contend.

Calgary-based junior independents Terraquest Energy Corp. and Masters Energy Inc. have agreed to merge and create a new public company that will be led by Masters’ current management team. Terraquest is a public company; Masters is a private oil and gas company formed in October 2003 by the former management team of Sunfire Energy Corp. In early December, Masters acquiring some Little Bow assets in southern Alberta for C$7 million, which are now producing 450 boe/d. On a pro forma basis, the merged company will have a production base of 950 boe/d, of which 60% is oil and 40% is natural gas. The merged company will hold approximately 85,000 net acres of undeveloped land in Alberta, with an inventory of natural gas prospects in West Central Alberta and oil and gas prospects in southern Alberta. The company, to be called Masters Energy Inc., will have no debt and working capital surplus of approximately C$2 million.

Houston-based Edge Petroleum Corp. agreed to merge Thursday with cross-town rival Miller Exploration Co. in a stock-for-stock deal worth about $12.7 million. The transaction of the two U.S.-focused independents would increase Edge’s estimated proved reserves and production about 10%, to between 8.8 Bcfe and 9 Bcfe this year.

Houston-based Edge Petroleum Corp. agreed to merge Thursday with cross-town rival Miller Exploration Co. in a stock-for-stock deal worth about $12.7 million. The transaction of the two U.S.-focused independents would increase Edge’s estimated proved reserves and production about 10%, to between 8.8 Bcfe and 9 Bcfe this year.

Independent Tom Brown Inc. is stocking up on natural gas reserves after agreeing to merge with privately held Matador Petroleum Corp. The transaction will increase the Denver-based independent’s reserves by 37% to 1 Tcfe. Matador, a privately held exploration and production company, is active primarily in the East Texas Basin and the Permian Basin of southeastern New Mexico and West Texas. It produced 61 MMcfe/d in the first quarter and holds proved reserves estimated to be 36% undeveloped, with 86% natural gas. The reserve life is 12 years. Additionally, Matador holds about 56,000 net developed ares and 111,000 net undeveloped acres. Tom Brown said the merger would be accretive to earnings and cash flow this year. The agreement already has been approved by both of the companies’ boards, and the deal is expected to close before the end of June. Under the terms of the definitive merger agreement, Matador shareholders will receive $17.53 per share and Tom Brown will assume $105 million of net debt. The transaction is subject to approval by the holders of two-thirds of Matador’s outstanding stock and other customary conditions. In connection with the execution of the merger agreement, Matador shareholders, who own 43% of Matador’s outstanding shares, have agreed to vote in favor of the transaction. Tom Brown said it would fund the acquisition initially with bank debt , but it also is evaluating other alternatives, including issuing equity as well as debt placement in private markets.

Independent Tom Brown Inc. is stocking up on natural gas reserves after agreeing to merge with privately held Matador Petroleum Corp. on Wednesday. The transaction will increase the Denver-based independent’s reserves by 37% to 1 Tcfe.

Bringing two Calgary-based E&P rivals together, Roseland Resources Ltd. and Rival Energy Inc. said that they have entered into a merger agreement under which one Rival Energy share will be given for every five Roseland shares.