This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Halcón Resources Buys Shale Driller GeoResources for $1B

Stocks in this article: HK GEOI

NEW YORK ( TheStreet) - Halcón Resources (HK - Get Report) is buying GeoResources (GEOI) at a value of roughly $1 billion in a cash and stock offer that will more than double its oil and gas reserves.

The deal also pushes Halcón Resources, a company that acquires and then develops oil and natural gas assets, further into shale and unconventional energy exploration such as the Williston Basin of Montana, North and South Dakota.

In the deal, Halcón Resources will pay $20 in cash and a stock conversion of 1.932 of its shares for each share of GeoResources, valuing the company at $37.97 a share or a 23% premium to Monday's closing price.

The merger adds to a 2012 flurry of deals related to unconventional drilling oil and gas plays. However, like other energy deals this year, the merger targets liquid oil and gas assets.

After the merger announcement, GeoResources shares rose more than 18% to an all-time high of $36.41 in premarket trading. According to Google Finance, the company has been publicly traded since the late 1970s.

"This transaction represents a significant opportunity for the shareholders of both companies to benefit from the combined strengths of Halcón Resources and GeoResources and is immediately accretive to discretionary cash flow, production and reserves on a per share basis," said Floyd Wilson, CEO of Halcón Resources, in a press release.

" The transaction will effectively increase our estimated proved reserves by over 150% to approximately 52.8 million barrels of oil equivalent, 69% of which is liquids, and substantially increase our average net daily production by over 170% to approximately 11,070 barrels of oil equivalent based on fourth quarter," he added.

The deal, which has been approved by the boards of both companies, still needs shareholder approval. Both companies expect to complete the merger in the third quarter of 2012. Upon completion of the merger, the stockholders of GeoResources will own roughly 18% of the combined company's outstanding shares.

"We are excited about the opportunity to partner with a company that is well positioned to become a leading liquids-focused resource player," said Frank Lodzinski, CEO of GeoResources, in a statement.

Barclays and Mitchell Energy Advisors acted as financial advisers to Halcón Resources and Wells Fargo Securities advised GeoResources.

-- Written by Antoine Gara in New York.

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,191.37 -195.84 -1.13%
S&P 500 2,002.42 -27.13 -1.34%
NASDAQ 4,637.9940 -43.5030 -0.93%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs