Apache Corp., Houston, and Phoenix Resource Cos. Inc., Oklahoma City, last week disclosed plans to merge by midyear in a deal that will expand Apache's international holdings.
Phoenix shareholders are to receive three fourths of one share of Apache common stock and $4 cash in exchange for each share of Phoenix common.
With Apache common valued at $28.50/share at midweek and about 16.1 million Phoenix shares outstanding, the value of the trade will be about $408.54 million.
The merger is subject to government approvals and a majority vote by Phoenix shareholders. Phoenix officers and directors unanimously committed to vote their shares in favor of the merger.
The merger will bring Apache reserves of about 33 million bbl of oil equivalent in 18 fields, more than 15,000 b/d of net oil production in 1997 when facilities are in full operation on the Qarun concession in Egypt, 50 drilling prospects, $30 million in working capital, and pipelines and facilities valued at about $50 million.
In addition, cost recovery provisions in Phoenix's production sharing contracts make available funding of more than $200 million from expected production for Apache's exploration and development program on the Qarun and Khalda concessions in Egypt.
The merger will boost Apache's acreage position in Egypt to 11.6 million gross acres.
Phoenix owns a 40% contractor interest in the 2.4 million acre Khalda and Khalda Offset concessions and is contractor-operator of the 1.9 million acre Qarun concession, in which it holds a 50% interest. Both are in the Western Desert.
Apache currently owns a 25% contractor interest in the Qarun block.
With the merger, Egypt will join Western Australia's Carnarvon basin as a core international region for Apache.
Phoenix operates only in Egypt.
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