Louis Dreyfus, Amex agree to seek merger

Consolidation continues within the ranks of independent U.S. exploration and production companies. Louis Dreyfus Natural Gas Corp., Oklahoma City, disclosed last week it plans to acquire Houston-based American Exploration Co. (Amex) in a cash-stock deal valued at about $350 million. The companies have signed a definitive merger agreement. The combined company would be headquartered in Oklahoma City, and Amex's Houston operations would become the new firm's Gulf Coast regional

June 30, 1997

2 min read

Consolidation continues within the ranks of independent U.S. exploration and production companies.

Louis Dreyfus Natural Gas Corp., Oklahoma City, disclosed last week it plans to acquire Houston-based American Exploration Co. (Amex) in a cash-stock deal valued at about $350 million.

The companies have signed a definitive merger agreement.

The combined company would be headquartered in Oklahoma City, and Amex's Houston operations would become the new firm's Gulf Coast regional headquarters.

Terms call for Amex shareholders to receive 0.72 share of Louis Dreyfus common stock and $3/share for each Amex share held. Preferred stock shareholders would receive Louis Dreyfus preferred shares.

The merger, subject to shareholder approvals, has been approved by the boards of both companies and is expected to be completed in September.

Simon Rich, chairman of Louis Dreyfus, will be chairman of the combined company. Mark Andrews, Amex chairman and CEO, will become vice-chairman, while Mark Monroe, Louis Dreyfus president and CEO, will serve in the same capacities for the combined company.

The combination

The merger will create an E&P company that will rank among the largest U.S. independents.

On a combined basis at yearend 1996, the companies had proved reserves of more than 1 tcf of gas and 33 million bbl of oil with a pre-tax present value (discounted at 10%) of $1.7 billion of future net reserves. Combined daily production during first quarter 1997 averaged about 249 MMcfd of gas and 9,100 b/d of oil.

Based on the June 24 closing price of both companies' common and preferred stock, the combined company will have an enterprise value of about $1.1 billion.