Stone Energy and Basin Exploration Announce Merger

Stone Energy Corporation and Basin Exploration, Inc. announced that their boards of directors have approved a definitive merger agreement to combine the two companies in a tax-free, stock-for-stock transaction. Under the agreement, Basin stockholders will receive 0.3974 shares of Stone for each Basin share. Based upon Stone's closing price of $54.16 on Friday, October 27, 2000, this represents $21.52 for each Basin share, a premium of 10%. The total equity value of the transaction is approximately $410 million. In addition, Stone will assume approximately $48 million of Basin debt. Stone's stockholders will own approximately 71% of the combined company and Basin's stockholders will own approximately 29%. The combination is expected to be accounted for as a pooling of interests and is anticipated to be immediately accretive on a per share basis to cash flow, earnings, and reserves. The companies expect the transaction to be completed early in 2001.

The combined company, to be called Stone Energy Corporation, will be headquartered in Lafayette, La. It will have a total market capitalization of approximately $1.5 billion ($1.4 billion in equity; $100 million in net debt) and a 23% pro forma total debt-to-book capitalization.