By OGJ editors
HOUSTON, July 17 -- Plains Exploration & Production Co. has agreed to acquire Pogo Producing Co. in a cash and stock deal valued at $3.6 billion.
Pogo stockholders will receive 0.68201 share of Plains E&P common stock and $24.88 cash for each Pogo stock share, representing a total consideration of about $60/share. The transaction is subject to stockholder approval from both companies.
The transaction nearly doubles Plains E&P's production with the addition of substantial producing properties and significant growth potential in Texas, primarily the Panhandle, Permian, and Gulf Coast regions, as well as the prolific Madden field in Wyoming and the San Juan basin in New Mexico.
The Pogo assets are complementary to the Plains E&P's assets, having long production lives and low decline rates. At yearend 2006 pro forma for asset sales, Pogo reported proven reserves of 219 million boe.
Upon closing, which is expected in the fourth quarter, Plains E&P will have a proved reserves base of 635 million boe. Proved, probable, and possible reserves potential is estimated at 1.4 billion boe.
Plains E&P is considering creating a master limited partnership as well.