Lomak, Domain sign definitive merger agreement

Lomak Petroleum Inc., Fort Worth, and Domain Energy Corp., Houston, have signed a definitive merger agreement. The combine will create a company with assets of more than $1.1 billion. The new firm will be called Range Resources Corp. "Range will have a high-margin reserves base of nearly 1 tcf of natural gas equivalent, a reserve life index of 12 years, an extensive development inventory, and a high-impact exploration program," said the firms in a joint statement.

May 18, 1998

3 min read

Lomak Petroleum Inc., Fort Worth, and Domain Energy Corp., Houston, have signed a definitive merger agreement. The combine will create a company with assets of more than $1.1 billion.

The new firm will be called Range Resources Corp.

"Range will have a high-margin reserves base of nearly 1 tcf of natural gas equivalent, a reserve life index of 12 years, an extensive development inventory, and a high-impact exploration program," said the firms in a joint statement.

Domain shareholders will receive $14.50 worth of Lomak common stock for each share of Domain. The exact exchange ratio will be determined immediately before completion of the merger, based on the market price of Lomak stock at that time.

Under terms of the agreement, an affiliate of First Reserve Corp. will sell Lomak 3.3 million shares of Domain stock (22% of the outstanding shares) for $43.9 million in cash. First Reserve has voted all of its Domain shares (52%) in favor of the combine, eliminating the need for any further approval by Domain shareholders.

What's included

Lomak and Domain are involved in more than 1,500 development projects in the Permian basin, U.S. Midcontinent, and Appalachia. They also have exploration and development programs in and off U.S. Gulf Coast states.

Their combined average production during the first quarter was 8,169 b/d of oil and liquids and 163 MMcfd of gas, and their reserves totaled about 960 bcf of gas equivalent.

At yearend 1997, the firms' proved reserves were worth about $830 million. The reserves are 73% gas and 80% operated.

Domain CEO Michael V. Ronca said, "Lomak's high-margin onshore operations give Range a degree of critical mass important in pursuing higher-risk opportunities in the Gulf of Mexico. As a billion-dollar company, Range will be able to maintain larger interests in the prospects it generates and increase its operations control offshore."

Range plans to expand its international business, initially through a 50% ownership in Domain Argentina SA. It also plans to expand Domain's Independent Producer Finance (IPF) subsidiary "aggressively."

IPF provides acquisition and development capital to small producers by acquiring overriding royalty interests.

The new firm's Gulf Coast and Gulf of Mexico properties, its international operations, and IPF will be managed by Domain's Houston staff. Domain's properties in West Texas will be transferred to Lomak's Permian basin business unit.

Lomak Pres. and CEO John H. Pinkerton will be president and CEO of Range Resources, while Ronca will be chief operating officer. Lomak Chairman Thomas J. Edelman will be Range's Chairman, and Ronca and Domain Chairman Jonathan S. Linker will join Range's board of directors.