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.
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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.
The siege of cold weather due this week had traders back in a stocking-up mood Friday as generally flat pricing reigned throughout the East despite the load decline that typically accompanies a weekend. However, a high-linepack OFO issued for Saturday by Southern California Gas, which was experiencing date-specific record warmth in its service area, had reverberations in the rest of the West, sending most regional numbers lower between about 3 cents and a dime.
If you got a lump of coal in your stocking this Christmas,rejoice. It could be the only thing left to heat your home by theend of winter. There is a growing consensus among gas marketexperts that there will be a shortage by March if the weather staysnormal or colder than normal.
ANR Pipeline slipped more than a few lumps of coal in GuardianPipeline’s stocking over the holidays’ in the form of a 250-pageprotest and motion for dismissal filed with FERC. The Coastalsubsidiary has a right to be angry at its new competitor. TheGuardian project will result in the decontracting of about 650MDth/d of ANR’s firm transportation capacity by Guardian shipperand affiliate Wisconsin Gas and the loss of $54 million in annualrevenue, according to ANR’s calculations.