Regulatory News:
Toreador Resources Corporation (NASDAQ: TRGL) (Paris: TOR)
(“Toreador”) and ZaZa Energy, LLC (“ZaZa”), a privately held oil
and gas company based in Houston, Texas, today announced that on
August 9, 2011, they signed a definitive agreement to combine the
companies. The combined portfolio comprises three areas – the Eagle
Ford core and the emerging Eagle Ford/Woodbine (“Eaglebine”)
resource plays in Texas and the Paris Basin in France with a
current total of 423,000 net acres. Both the Eagle Ford and Paris
Basin businesses have strategic partnerships with subsidiaries of
Hess Corporation. Based on the closing share price of Toreador on
Tuesday, August 9, 2011, the implied market capitalization for the
combined company is approximately $294 million.
Under the terms of the transaction, ZaZa equity holders will
receive approximately 76.2 million shares, representing 75 percent
of the new company, ZaZa Energy Corporation (the “Company”), as
well as $50 million in notes or cash. Toreador stockholders will
receive approximately 25.4 million shares, representing 25 percent
of the new Company. The transaction has been unanimously approved
by the Toreador Board of Directors and the equity holders of
ZaZa.
The Company will be headquartered in Houston, Texas, with
offices in Corpus Christi, Texas and Paris, France, and is expected
to trade on the NASDAQ under the stock ticker symbol “ZAZA”. The
transaction is subject to Toreador stockholder approval, regulatory
approvals and other customary closing conditions. The transaction
is expected to close in the fourth quarter of 2011.
In the Eagle Ford core, ZaZa holds 123,000 gross acres; the
joint venture work program forecasts over 280 wells drilled by the
end of 2013. In the Eaglebine, leasing is underway to expand the
existing 70,000 gross acres to over 100,000 gross acres within the
next 12 months. ZaZa has been in discussions with potential joint
venture partners for the Eaglebine acreage and plans to spud a
first well by the first quarter of 2012. In the Paris Basin, a
one-rig oil exploration drilling program targeting traditional
reservoirs is expected to commence by late 2011. The Liassic
drilling program comprising six wells (without the use of hydraulic
fracturing) is expected to commence by year-end pending final
review of permits by the French Administration.
Net production in the Eagle Ford core and the Paris Basin is
expected to exceed 1,100 boe/d by year-end 2011, increasing to
5,000 boe/d by the end of 2013, which does not include any
contribution from future drilling in the Eaglebine, Paris Basin
conventional or Liassic.
Mr. Adam Kroloff, Toreador non-executive Chairman, said, “This
combination offers a strategically distinctive international
E&P investment opportunity. Together with ZaZa, we are offering
stockholders access to the rapid growth of the Eagle Ford and will
also maintain attractive exposure to the potential of the Paris
Basin."
Mr. Craig McKenzie, Toreador President and CEO, said, “The new
company brings together two skilled teams and a complementary set
of assets in the Eagle Ford and Paris Basin. This will deliver an
immediate and sustainable production increase as well as secure a
robust inventory of growth projects that we expect to accelerate to
the benefit of all stakeholders.”
Mr. Todd Brooks, Co-Founder and Managing Partner, Land, Legal
and Finance, of ZaZa, said, “Our combination with Toreador is the
culmination of our efforts over the past two years to diversify our
asset base while building a growth oriented company and exploiting
one of the most economic shale plays in the continental United
States. ”
Mr. John Hearn, Jr., Co-Founder and Managing Partner,
Geosciences, of ZaZa, said, “As a first mover, we have captured
sizeable land holdings in the oil and gas condensate windows of the
Eagle Ford core with further expansion available. Our combined
geoscience team is excited about developing the Eaglebine and the
Paris Basin. ”
Mr. Gaston Kearby, Co-Founder and Managing Partner, Operations,
of ZaZa, said, “Successful resource play exploitation hinges on
operational excellence; our drilling and completions team is world
class and we look forward to working with the team at Toreador. Our
combined operational capabilities will allow the Company to fully
exploit its expanding asset portfolio.”
ZaZa Energy, LLC and the Eagle Ford
ZaZa Energy, LLC is a privately held oil & gas company
focused on the exploration and development of both conventional and
unconventional reserves in the United States. An early mover in
Eagle Ford, ZaZa Energy, LLC currently holds approximately 200,000
gross acres in the trend, including 70,000 gross acres in the
Eaglebine. These holdings include more than 123,000 gross acres in
the core area of the trend being developed through a joint venture.
ZaZa Energy, LLC is the operator and holds a 10 percent carried
working interest through completion of approximately 200 wells of
the forecast 280 wells in the Eagle Ford core. The joint venture is
currently operating three rigs in the Eagle Ford with expectations
of going to four rigs in the Eagle Ford core and one rig in
Eaglebine in the first quarter of 2012. In the Eagle Ford core,
ZaZa has drilled 14 wells and is expected to drill a total of 30
wells by year-end 2011. Additional land acquisition has been
provided for under the terms of the joint venture.
The Eagle Ford is a shale formation located in South Texas. The
formation produces at depths between 4,000 and 14,000 feet, and has
responded well to fracture stimulation making it one of the
fastest-growing oil shale plays in the US. The Eagle Ford has
attracted many oil companies within the past few years due to its
high liquids yields and is expected to be one of the highest
producing shale plays in North America. Public data suggests that
industry production growth from the Eagle Ford is expected to
increase 500 percent in five years, from 2010 levels of 70,000
boe/d to an average of 421,000 boe/d in 2015.
Toreador Resources Corporation and the Paris Basin
Toreador holds interests in developed and undeveloped oil
properties in the Paris Basin, France. The Paris Basin has been an
oil-producing region for more than 50 years, with production of
approximately 10,000 bopd in 2010 and cumulative production of
almost 300 million barrels of oil. Toreador’s conventional oil
program production rates are approximately 880 bopd; proved
reserves were 5.5 million barrels of oil as of year-end 2010.
Toreador has exploration permits totaling 340,000 net acres with
its partner, making it the largest permit holder in the core of the
Paris Basin.
Currently, Toreador’s plan is to proceed with the six well
drilling program with its partner in late 2011, in full compliance
with the revised regulatory regime.
Corporate Governance
Upon closing of the transaction, it is anticipated that Craig
McKenzie will become the President and Chief Executive Officer of
the Company. Under the terms of the agreement, ZaZa has the right
to appoint seven members and Toreador has the right to appoint two
members to the Board of Directors. The Board of Directors and
management team of the Company will be announced prior to closing
of the transaction.
Conference Call
A conference call is scheduled at 12:00pm Eastern time to
discuss the transaction. Listeners may access this call by dialing
+1 (866) 271-5140. The ID# for this call is 61059791. Listeners
outside the U.S. may access the call by dialing (001) 617-213-8893
(toll charges apply), and using the same conference ID number
61059791. This conference call will also be webcast. Listeners may
access the webcast by accessing the investor relations section of
the Toreador website at www.toreador.net. The webcast can also be
accessed at http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=131837&eventID=4176484.
A series of presentation slides will be used during this call.
These slides may be accessed on the Toreador and ZaZa transaction
website www.ToreadorZaza.MergerAnnouncement.com. These materials
can also be accessed by selecting the Investor Relations page on
the Toreador website.
A replay of this conference will be available for 14 days after
the call by dialing +1 (888) 286-8010 within the U.S. or (001)
617-801-6888 from outside the U.S. using ID number 83456554.
Additionally, the webcast link above may be used for replay up to
twelve months.
Rodman & Renshaw, LLC, a subsidiary of Rodman & Renshaw
Capital Group, Inc., is acting as financial advisor to ZaZa,
Andrews Kurth and Baker Botts are providing legal advice to ZaZa,
and KPMG is providing tax advice to ZaZa. RBC Capital Markets is
acting as financial advisor to Toreador, and Fried Frank Harris
Shriver & Jacobson LLP is providing legal advice to Toreador.
McKenna Long and Aldridge LLP is providing legal advice to the
Board of Directors of Toreador.
About Toreador
Toreador Resources Corporation is an international energy
company engaged in the acquisition, development, exploration and
production of crude oil. The company holds interests in developed
and undeveloped oil properties in France. More information about
Toreador may be found at the company's web site,
www.toreador.net.
About Zaza Energy, LLC
Headquartered in Houston, Texas, ZaZa Energy LLC is a privately
held oil & gas company focused on the exploration and
development of both conventional and unconventional reserves with
primary assets in the Eagle Ford resource play. More information
about ZaZa may be found at the company's web site,
www.zazaenergy.com.
Safe Harbor Statement
Except for the historical information contained herein, the
matters set forth in this news release are “forward-looking
statements” within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended. Toreador intends that all such statements be
subject to the “safe-harbor” provisions of those Acts. Many
important risks, factors and conditions may cause Toreador’s actual
results to differ materially from those discussed in any such
forward-looking statement. These risks include, but are not limited
to, estimates of reserves, estimates of production, future
commodity prices, exchange rates, interest rates, geological and
political risks, drilling risks, product demand, transportation
restrictions, actual recoveries of insurance proceeds, the ability
of Toreador to obtain additional capital, and other risks and
uncertainties described in the company’s filings with the
Securities and Exchange Commission. The historical results achieved
by Toreador are not necessarily indicative of its future prospects.
The company undertakes no obligation to publicly update or revise
any forward-looking statements, whether as a result of new
information, future events or otherwise.
This communication shall not constitute an offer to sell or the
solicitation of an offer to sell or the solicitation of an offer to
buy any securities, nor shall there be any sale of securities in
any jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offer of securities
shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act of 1933, as
amended.
Important Information
ZaZa Energy Corporation, the new company that will be
established in connection with the proposed transaction, will file
a registration statement and Toreador Resources Corporation will
file a proxy statement with the Securities and Exchange Commission
(the “SEC”). Investors are urged to
read the registration statement and proxy statement (including all
amendments and supplements to it) when they become available
because they will contain important information. Investors may
obtain free copies of the registration statement and proxy
statement when it becomes available, as well as other filings
containing information about Toreador Resources Corporation and
ZaZa Energy Corporation, without charge, at the SEC’s Internet site
(www.sec.gov). These documents may also be obtained for free from
Toreador’s Investor Relations web site (www.toreador.net) or by
directing a request to Toreador at Toreador at: Investor Relations,
Toreador Resources Corporation, c/o Toreador Holding SAS, 5 rue
Scribe, Paris France, 75009.
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