Ocean Energy, United Meridian To Merge

Ocean Energy Inc and United Meridian Corp announced Tuesday their boards had approved a definitive merger agreement that would create an oil and gas company with a market capitalisation of $3.1 billion.

Under the agreement, each common share of United Meridian will be converted into 1.3 common shares of the combined company, while holders of each Ocean Energy common share will receive 2.34 shares of the new company.

With total shares outstanding of 100 million shares, the new company will be held 53.6 percent by Ocean Energy shareholders and 46.4 percent by United Meridian shareholders.

Management will own about 15 percent of the common stock of the combined company, which will be based in Houston.

 

The companies said that based on market capitalisation, the merged entity, which will retain the name Ocean Energy Inc, would be the ninth largest independent oil and gas company in the world.

John Brock, chairman and chief executive officer of United Meridian, will become chairman of the new company, while James Flores, chairman, president and CEO of Ocean Energy, will be its president and CEO.

The two executives will enter into long-term employment agreements with the new company, a condition for the closing of the merger deal.

The merger will be accounted for as a pooling of interests and is expected to close by the end of March 1998. The deal is subject to approval by shareholders of both companies and to regulatory approvals.

Ocean Energy and United Meridian said their merger combined high impact prospects in West Africa and the Asian basin and long-lived reserves in North America with geographically concentrated, high-working-interest producing properties and exceptional shelf and deepwater Gulf of Mexico exploration prospects.

They said that on a combined basis, current daily production rates were about 58,000 barrels of oil and 350 million cubic feet of gas or a total of 116,000 barrels of oil equivalent.

The combined proved reserve base, they said, would be about 250 million barrels of oil equivalent.