Halcon Resources Corp. has agreed to buy producing and undeveloped oil-and-gas assets in the Williston Basin from Petro-Hunt LLC and an affiliated entity for about $1.45 billion in cash and stock.
"This acquisition is immediately accretive on all measures and is consistent with our strategy of building an oil company with a multi-year drilling inventory in several liquids-rich basins," Halcon Chief Executive Floyd C. Wilson said. "The assets we are acquiring are located in what is arguably the most attractive oil-producing basin in the lower 48, on a risk-adjusted basis."
He also noted the deal improves Halcon's leverage profile and will effectively increase its estimated proved reserves on a pro forma basis by more than 58%, to about 115 million barrels of oil equivalent.
Halcon will pay $700 million in cash and $750 million in stock for about 81,000 net acres prospective for the Bakken and Three Forks formations, located primarily in Williams, Mountrail, McKenzie and Dunn Counties, North Dakota.
Current average net production from these assets exceeds 10,500 barrels of oil equivalent per day and total proved reserves are about 42.4 million barrels of oil equivalent. Currently, there are five operated drilling rigs running on the properties.
The $750 million in stock initially will be issued as preferred stock that will automatically convert into common stock at $7.45 a share, a 5.4% premium over the company's Friday closing price, following an increase in Halcon's authorized common shares.
Halcon said it expects the deal to close in December.
Petro-Hunt will continue to operate production of approximately 24,000 Boe/d and develop its 600,000 plus acres of oil and gas leasehold in the Williston Basin, said President Bruce W. Hunt.
Shares of Halcon closed at $7.07 Friday and were inactive in recent premarket trading. The stock is off 25% so far this year.
Copyright (c) 2012 Dow Jones & Company, Inc.
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