Plains Exploration Picks Up Pogo Producing
Pogo shareholders will receive 0.68201 shares of Plains stock and $24.88 in cash for each share they hold. Based on Plains' closing price Monday, the deal values Pogo at $60 a share -- a 19% premium over its close of $50.48 Monday.
Plains said the transaction will create a company with total estimated reserve potential of 1.4 billion barrels of oil equivalent.
"This transaction almost doubles PXP's production with the addition of substantial producing properties and significant growth potential in Texas, primarily the Panhandle, Permian and Gulf Coast, plus the prolific Madden Field in Wyoming and the San Juan Basin in New Mexico," said Plains Chairman, President and CEO James Flores in a statement.Flores said the company has financial advisers to help it evaluate the possibility of becoming a master limited partnership, a common structure for oil and gas companies. The deal is expected to close in the fourth quarter. Shares of Plains were down $1.69, or 3.3%, to $49.50 in early trading. Pogo shares soared $7.22, or 14%, to $57.70.
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