Penn Virginia To Acquire Synergy Oil & Gas
Penn Virginia Corporation announced that it has entered into a definitive merger agreement to acquire Houston-based Synergy Oil & Gas, Inc. in a cash transaction for $112 million subject to certain adjustments. Synergy is a privately owned independent exploration and production company with operations primarily in the Texas onshore Gulf Coast and West Texas areas. The transaction, which is subject to satisfactory completion of due diligence, is expected to close by July 23, 2001 and will be funded from an existing bank facility.
Penn Virginia estimates Synergy will have total net proved reserves as of July 1, 2001 of 59.2 billion cubic feet equivalent (Bcfe), about 55% of which is natural gas and 45% is oil. Current daily net production is 12.0 million cubic feet (Mmcf) of natural gas and 1,200 barrels of oil, or 19.2 Mmcf equivalent. Synergy currently has interests in 25 fields, 20 of which are in the onshore Gulf Coast. Two Texas fields, SW Rugeley in Matagorda County, TX and Tom Lyne in Live Oak County, TX, account for 46% of the estimated net proved reserves and 40% of first quarter 2001 net production. In addition, Synergy has interests in 163 producing wells, approximately 86% of which it operates, and control of 27,300 net developed and 10,000 net undeveloped leasehold acres and 214 square miles of 3-D seismic data.