Petrohawk and KCS Provide Merger Update; Companies Clear Regulatory Hurdle, Increase Hedge Position and Look Forward to July 12
June 22 2006 - 12:55PM
Business Wire
Petrohawk Energy Corporation (NASDAQ:HAWK) ("Petrohawk") and KCS
Energy, Inc. (NYSE:KCS) ("KCS") today announced the June 19, 2006
expiration of the waiting period for U.S. antitrust review under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, in connection with the previously announced proposed
merger of Petrohawk and KCS. The expiration of the
Hart-Scott-Rodino waiting period satisfies one of the conditions to
the merger. Consummation of the merger remains subject to other
customary closing conditions, including approval of the merger by
the stockholders of both companies. Proxy statements were mailed to
stockholders on June 5, 2006 in advance of stockholders' meetings
to be held by both Petrohawk and KCS on July 12, 2006. In addition,
Petrohawk announced that over approximately 75% in principal amount
as of 5:00 p.m. EDT, of its outstanding 9 7/8% Senior Notes due
2011 have been tendered along with related consents in connection
with its cash tender offer to purchase any and all of the
outstanding $124,490,000 aggregate principal amount of its Notes.
The tender offer and consent solicitation are being made pursuant
to the terms and subject to the conditions set forth in an Offer to
Purchase and Consent Solicitation Statement from Petrohawk dated
June 8, 2006, as amended earlier this week, and a consent and
letter of transmittal, which have more details including a
description of the terms of the tender offer and consent
solicitation. The tender offer is scheduled to expire at 5:00 p.m.
EDT on July 10, 2006, unless extended. The consent date is today,
June 22, 2006. Holders must tender their Notes and deliver their
consents by 5:00 p.m. EDT, unless extended by Petrohawk, to qualify
for payment of total consideration for the Notes, which includes
the consent payment. Petrohawk also announced today that it has
entered into derivative contracts covering 20,000 MMbtu/day of
production for calendar year 2007. The contracts are in the form of
costless collars with an average floor price of $7.50/MMbtu and an
average ceiling price of $12.87/MMbtu. KCS announced that it has
entered into costless collars covering 13,740 MMbtu/day of
production for calendar year 2007 with an average floor price of
$7.45/MMbtu and an average ceiling price of $12.89/MMbtu. Petrohawk
and KCS currently plan to continue to periodically put additional
hedges in place in order to reach a desired hedging level for the
combined companies of approximately 50% of anticipated production
for 2007. Petrohawk and KCS also indicated they have received
inquiries regarding whether their proposed merger will constitute a
change of control with respect to the indenture governing the KCS 7
1/8% Senior Notes due 2012, entitling the holders to put them to
the issuer at 101%. After reviewing the substance of these
inquiries, Petrohawk and KCS, after consultation with counsel,
continue to believe there will be no such change of control, as
supported by the calculation of the number of Petrohawk common
shares expected to be issued to KCS stockholders in the merger and
other relevant factors. Petrohawk and KCS announced their proposed
merger on April 21, 2006, which, upon closing, will have the effect
of creating a leading onshore oil and gas producer with an
enterprise value of approximately $3.5 billion. On a pro forma
basis, the Company will have approximately one trillion cubic feet
of natural gas equivalents (Tcfe) of proved reserves with current
production of approximately 300 MMcfe/day, of which approximately
68% would be classified as proved developed and approximately 77%
would be natural gas, and approximately 3 Tcfe of non-proved
reserve potential in its inventory. This press release does not
constitute an offer to purchase or a solicitation of acceptance of
the tender offer, which may be made only pursuant to the terms of
the Offer to Purchase and Consent Solicitation Statement and
related consent and letter of transmittal. In any jurisdiction
where the laws require the tender offers to be made by a licensed
broker or dealer, the tender offer shall be deemed made on behalf
of Petrohawk by Credit Suisse or one or more registered brokers or
dealers under the laws of such jurisdiction. Petrohawk Energy
Corporation is an independent oil and gas company engaged in the
acquisition, development, production and exploration of natural oil
and gas properties located in North America. Petrohawk's properties
are concentrated in the East Texas/North Louisiana, Gulf Coast,
South Texas, Permian Basin, Anadarko and Arkoma regions. KCS is an
independent oil and gas company engaged in the acquisition,
exploration, development and production of natural gas and oil
properties primarily located in the Mid-Continent and onshore Gulf
Coast regions of the United States. KCS also has interests in
producing properties in Michigan, California, Wyoming and offshore
Gulf of Mexico. -0- *T For more information please refer to
Petrohawk's and/or KCS's websites or contact: For Petrohawk: Shane
M. Bayless or Joan Dunlap (832) 204-2727 (832) 204-2737
sbayless@petrohawk.com jdunlap@petrohawk.com For KCS Energy: Jim
Christmas (713) 877-8006 *T Additional Information for Investors
This press release contains forward-looking information regarding
Petrohawk and KCS that is intended to be covered by the safe harbor
"forward-looking statements" provided by the Private Securities
Litigation Reform Act of 1995. All statements included in this
press release that address activities, events or developments that
Petrohawk and KCS expect, believe or anticipate will or may occur
in the future are forward-looking statements. These often, but not
always, are identified by using words such as "expects",
"anticipates", "plans", "estimates", "potential", "possible",
"probable", or "intends", or stating that certain actions, events
or results "may", "will", "should", or "could" be taken, occur or
be achieved). Forward-looking statements are based on current
expectations, estimates and projections that involve a number of
risks and uncertainties, which could cause actual results to differ
materially from those reflected in the statements. These risks
include, but are not limited to the possibility that the companies
may be unable to obtain stockholder or other approvals required for
the merger Additional information on risks and other factors which
could affect either companies' operations or financial results are
included in the companies' other reports on file with the United
States Securities and Exchange Commission. Forward-looking
statements are based on the estimates and opinions of both
companies' management at the time the statements are made. Neither
Petrohawk nor KCS assume any obligation to update forward-looking
statements should circumstances or management's estimates or
opinions change. Additional Information About the Transaction and
Where to Find It: Petrohawk has filed a registration statement on
Form S-4 (Registration Number 333-134235) with the SEC that
contains a prospectus and a joint proxy statement regarding the
proposed transaction. Investors and security holders of Petrohawk
and KCS are urged to read the definitive joint proxy
statement/prospectus and any other relevant materials filed with
the SEC, as well as any amendments or supplements to those
documents, because they will contain important information about
Petrohawk, KCS and the proposed transaction. Investors and security
holders may obtain these documents free of charge at the SEC's
website at www.sec.gov. In addition, materials filed with the SEC
by Petrohawk may be obtained free of charge from Petrohawk's
website at www.petrohawk.com. Materials filed with the SEC by KCS
may be obtained free of charge from KCS's website at
www.kcsenergy.com. Petrohawk, KCS and their respective executive
officers and directors may be deemed to be participants in the
solicitation of proxies from the stockholders of Petrohawk and KCS
in favor of the proposed transaction. Information about the
executive officers and directors of Petrohawk and their direct or
indirect interests, by security holdings or otherwise, in the
proposed transaction are set forth in the joint proxy
statement/prospectus relating to the proposed transaction.
Information about the executive officers and directors of KCS and
Petrohawk and their direct or indirect interests, by security
holdings or otherwise, in the proposed transaction are set forth in
the joint proxy statement/prospectus relating to the proposed
transaction.
K C S Energy (NYSE:KCS)
Historical Stock Chart
From May 2024 to Jun 2024
K C S Energy (NYSE:KCS)
Historical Stock Chart
From Jun 2023 to Jun 2024