Tom Brown to acquire Stellarton Energy

Tom Brown said it will establish a 'significant' core area in western Canada by acquiring Canadian company Stellarton Energy Corp. in a stock transaction valued at $94.8 million, including $14.5 million in net debt. Tom Brown expects to initiate an all-cash tender offer of $3.29/share on or before Dec. 22.

Dec 14th, 2000


Tom Brown Inc., Denver, has agreed to acquire Canada-based Stellarton Energy Corp. in a stock transaction valued at $94.8 million, including estimated net debt of $14.5 million. Tom Brown expects to initiate an all cash tender offer of $3.29/share on or before Dec. 22.

The acquisition of Stellarton establishes a significant core area in western Canada for Tom Brown, said the company.

Tom Brown expects this acquisition to be accretive to 2001 earnings and cash flow per share. The company said it expects pro forma debt to total book capitalization of 24%.

Stellarton's assets are located in western Alberta. Its net proved reserves after royalty are 58.6 bcf of gas and 2.82 million bbl of oil and natural gas liquids.

More than 80% of the current production and reserves are concentrated in three fields: Carrot Creek, Edson and Drumheller. Net production after royalty is 26.7 MMcfe/d. Stellarton owns 40 MMcfe/d of plant capacity. It also controls 155,000 net undeveloped acres, of which 65,000 net acres are located in the Hamburg/Chinchaga Slave Point gas play.

The acquisition has been unanimously approved by the Boards of Directors of Tom Brown and Stellarton and is expected to be completed in early 2001.

Directors, officers and other shareholders representing 51% of the outstanding stock of Stellarton have entered into agreements to tender their shares in the acquisition.

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