Sabine Oil & Gas LLC and Forest Oil Corp. have signed a definitive merger agreement under which the companies will combine their businesses in an all-stock transaction. The combined entity will be known as Sabine Oil & Gas Corp., headquartered in Houston, and led by Sabine’s current executive management team.
The combined entity will have a 207,000 net acreage position in East Texas and a 65,000 net acreage position in the Eagle Ford.
The companies emphasized that the complementary nature of their assets present opportunities to generate savings through operating synergies, benefits of scale, and optimized capital allocation.
“Since Sabine began in 2007, we have focused on building a significant asset base in East Texas and with this combination we have created a leading industry position in this highly economic, multiplay basin,” said David Sambrooks, Sabine president and chief executive officer.
The companies also have assets in the Granite Wash, Permian, and Arkoma.
The combined company will have estimated proved reserves of 1.5 tcf of gas equivalent, of which 71% is gas, as of Dec. 31, 2013. This year’s production totals 345 MMcfed, of which 65% is gas.
Upon completion of the transaction, David Sambrooks will serve as the company’s chairman as well as president and chief executive officer. Shane Bayless will serve as executive-vice president and chief financial officer, and Todd Levesque will serve as executive vice-president and chief operating officer.
The board will be comprised of the existing six Sabine board members, as well as two of the current Forest board members. The transaction is expected to close during this year’s third or fourth quarters.