Stone Completes Preferential Rights Acquisition, Ups Borrowing Base
Stone Energy Corp. said that on July 14 it completed the preferential rights acquisition of additional working interests to depths of 20,000 feet in Mississippi Canyon blocks 108 and 109. The acquisition cost, net of purchase price adjustments, totaled approximately $189.3 million, which was financed with proceeds from the recent $225 million senior floating rate notes issuance.
Based on Stone's Dec. 31, 2005, reserve report, the acquisition added estimated proved reserves of 57 billion cubic feet of gas equivalent in the acquisition. Production associated with the acquired interests was approximately 25 million cubic feet of gas equivalent per day before the platform was shut-in due to pipeline damage from Hurricane Katrina. Repairs to the pipeline facilities are ongoing and production is expected to resume in the fourth quarter of 2006. Stone now has a 100% working interest in Block 109 and a 24.8% working interest in Block 108 and will be the operator of both blocks.
In conjunction with the closing of this preferential rights acquisition, Stone secured an increase in the borrowing base of its bank credit facility to $325 million--of which $76.1 million is currently available, with $192 million drawn and $58.9 million committed to letters of credit.
Headquartered in Lafayette, La., Stone Energy is an independent oil and natural gas company that is engaged in the acquisition and subsequent exploration, development, operation, and production of oil and gas properties located in the conventional shelf of the Gulf of Mexico, the deep shelf of the Gulf of Mexico, the deepwater of the Gulf of Mexico, the Rocky Mountain region, and the Williston Basin. Stone is also engaged in an exploratory joint venture in Bohai Bay, China.
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