Stone Energy to Purchase Bois dArc in $1.8B Deal

Stone Energy to Purchase Bois dArc in $1.8B Deal

Oil and natural gas producer Stone Energy Corp. plans to buy Bois d’Arc Energy in a cash and stock deal valued at about $1.8 billion, including debt.

Bois d’Arc stockholders will get $13.65 in cash and 0.165 shares of Stone stock for each share of Bois d’Arc they own. The offer price values the company at about $24.85 per share, a 4 percent discount to Bois d’Arc’s Tuesday close of $25.98.

The deal is expected to close in the third quarter. After that, Stone expects to produce about 300 million cubic feet of equivalent per day with over 700 billion cubic feet of equivalent in estimated proved reserves.

Comstock Resources Inc. holds a 49 percent stake in Bois d’Arc and has a shareholder agreement to vote in favor of the deal.

KeyBanc Capital Markets analyst Jack Aydin thinks Comstock could be the big winner in the deal — getting $440 million in cash, 5.3 million shares of Stone for its Bois d’Arc stake and effectively owning 13 percent of Stone after the transaction closes.

“We believe that Comstock will be more of an onshore E&P (exploration and production) company with a strong organic production growth profile, considering its underlying onshore asset base (especially in East Texas/North Louisiana),” Aydin wrote in a note to investors. “For 2008, we are projecting Comstock’s onshore-only production to increase by 22.3 percent.”

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