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DEVON ENERGY NEGOTIATING TO BUY OIL AND GAS ASSETS FOR $140 MILLION: TO FILE REGISTRATION STATEMENT TO OFFER NEW COMMON SHARES

DEVON ENERGY NEGOTIATING TO BUY OIL AND GAS ASSETS FOR $140 MILLION:
 TO FILE REGISTRATION STATEMENT TO OFFER NEW COMMON SHARES
 OKLAHOMA CITY, Feb. 28 /PRNewswire/ -- Devon Energy Corp. (AMEX: DVN) today said it is negotiating to purchase substantially all of the U.S. oil and gas properties of Hondo Oil & Gas Company (AMEX: HOG) for $140 million in cash effective Dec. 31, 1991.
 Estimated proved reserves for the properties are 13 to 14 MMBO (million barrels of oil) and 80 to 85 BCFG (billion cubic feet of gas). The purchase also would include undeveloped leasehold (drilling rights), interests in seven natural gas processing plants, and miscellaneous assets with an aggregate value of approximately $14 to $16 million. The transaction is expected to be consummated during the second quarter of 1992. The acquisition is subject to financing, to execution of a definitive contract, to approval of each company's board of directors, and to the approval of the Hondo shareholders.
 Financing: Bank Debt and Public Offering of Common Stock
 Adjustments for reserves produced and cash flow from operations from Dec. 31, 1991, to the closing date are expected to reduce the net purchase price to approximately $130 million. Devon expects to fund this amount with a combination of bank financing and the proceeds from the sale of new common stock.
 The company expects to increase its bank indebtedness from $32 million up to $90 to $100 million upon consummation of the purchase. The company has received a preliminary indication from its banks of the group's intention to expand Devon's existing borrowing facilities up to $105 to $115 million.
 If a definitive agreement is reached, Devon intends to file a registration statement with the Securities and Exchange Commission within 30 days to publicly offer $60 to $70 million of new common stock. Devon's total common shares outstanding would likely rise from 8.7 million up to 15 to 17 million. The issuance and sale of the new shares will be conditioned upon, among other things, the consummation of the purchase and the expansion of the bank credit facilities.
 Assets to be Acquired: Producing Properties,
 Undeveloped Leases, Seismic Data, Gas Plants
 The assets to be acquired would include interests in approximately 2,700 properties with 5,300 producing oil and gas wells in 13 states.
 These wells produced approximately 2.7 MMBO and 13 BCFG during calendar 1991. Most of the wells are located in Texas, Oklahoma, New Mexico and Wyoming.
 The assets also include 180,000 to 200,000 net acres of undeveloped leasehold. Most of this acreage is affiliated with the existing producing properties. Additionally, Devon would acquire 3,200 miles of seismic information associated with the producing and nonproducing assets. (Seismic lines are technical data used in the interpretation of geology and are used to determine drilling prospects.) Certain miscellaneous assets associated with the previously described properties also would be acquired. Further, Devon would purchase Hondo's interests in seven natural gas processing plants. Devon will not purchase any interest in Hondo's refinery, Wilmington Oil Field interests around Long Beach, Calif., real estate holdings, or in Hondo's international exploration projects, including those in Colombia, South America.
 Acquisition Would Substantially Increase Devon's Size and Scope
 On Feb. 4, 1992, Devon announced year-end 1992 reserves of 3.8 MMBO and 191.6 BCFG. If consummated, the acquisition would approximately quadruple the company's oil reserves to 17 MMBO. Its gas reserves would increase some 40 percent up to 270 to 275 BCFG. Total net undeveloped acreage would increase from 12,000 net acres to 200,000 net acres. And, the company's total oil and gas property count would increase from approximately 1,200 properties with 2,700 wells to 3,000 properties with 8,000 wells. The size and scope of Devon's operations would rise substantially, requiring an increase in financing capacity and employee count. The company's gas/oil ratio would change from 90/10 to 60/40.
 Conditions
 The purchase is subject to several conditions including, but not limited to, those following. The transaction is subject to negotiation of a definitive agreement and to the approval of the committee of the independent Hondo directors, to the full Hondo board of directors, and to Hondo's shareholders. The transaction also is subject to the approval of the full Devon board of directors (but not Devon's shareholders). Further, Devon must obtain financing, including bank financing and the proceeds from the offer and sale of new Devon common shares to the public. Both the bank financing and the stock offering are conditioned upon each other and to the consummation of the purchase of the Hondo assets.
 Devon Energy Corp. is an independent energy company engaged primarily in oil and gas property acquisitions, exploration and production, and oil and natural gas remarketing. The company ranks in the top 25 percent of U.S. publicly held oil and gas firms, measured by oil and gas reserves.
 -0- 2/28/92
 /CONTACT: Marian J. Moon of Devon Energy Corp., 405-235-3611/
 (DVN) CO: Devon Energy Corp. ST: Oklahoma IN: OIL SU: TNM TQ -- NY029 -- 3716 02/28/92 12:25 EST
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Publication:PR Newswire
Date:Feb 28, 1992
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