By the OGJ Online Staff
HOUSTON, May 25 -- Unocal Corp.'s Canadian subsidiary, Northrock Resources Ltd., will make a take-over bid to acquire Tethys Energy Inc., Calgary, for $93 million.
Northrock intends to mail the offer to Tethys shareholders by June 4 with closing expected in mid-July.
The bid has the unanimous support of the Tethys board of directors. The offer price for each Tethys share will be $2.74 in cash. Tethys has 33.9 million shares outstanding on a fully diluted basis.
Northrock will assume Tethys' debt of $19 million. The offer will be conditional on at least 66.6% of Tethys' shares being tendered. Tethys agreed not to solicit competing offers and pay a $4.2 million noncompletion fee.
Tethys has proved reserves (US basis) of 12 MMboe on a 6:1 net basis. More than 60% of the reserves are liquids-rich gas.
Tethys' production is 4,600 boe/day (6:1 net basis), including 16 MMcfd of gas.
Don Hansen, Northrock CEO, said, "We expect to increase production to more than 6,000 boe/d from the Tethys properties by the end of this year. Most of this additional production will be natural gas."