This Day On The Street
Continue to site right-arrow
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
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Forestar To Acquire Credo Petroleum

Stocks in this article: CRED FOR

Note: All reserve data before income taxes

*Includes both fee and leasehold interests; Forestar acres as of first quarter end 2012.

“Credo has been successfully transitioning from a natural gas to oil focused strategy and increasing exploration and drilling activity as hundreds of drilling locations have been de-risked,” said Mr. DeCosmo. “Credo is just beginning to benefit from its ownership in the prolific Bakken and Three Forks formations, with only 1.3 million BOE of reserves associated with this interest at fiscal year-end 2011. Going forward, we expect to see meaningful growth in production and reserves in the Bakken given Credo’s 8% average working interest position in approximately 50 total units. There is the potential for Forestar to participate in as many as 400 total wells in the primary Bakken and Three Forks zones.”

Transaction Summary

The transaction is structured as a reverse subsidiary merger, with a total equity value of approximately $146 million, or $14.50 per share of Credo common stock. Forestar has obtained a commitment for financing provided by Key Bank National Association that, combined with available liquidity, is sufficient to fund the acquisition. Forestar intends to pursue amendments to its existing credit facilities to fund a significant portion of the purchase price. The transaction is subject to customary closing conditions, including approval by Credo’s stockholders, and is expected to close in the second half of 2012. In connection with the merger agreement, Forestar entered into voting agreements with James T. Huffman, Chairman of the Board of Directors of Credo, RCH Energy Opportunity Fund III, LP and RCH Energy SSI Fund, LP to vote the shares of Credo common stock held by them in favor of the merger agreement, and the transactions contemplated thereby subject to the terms and conditions of the voting agreements.

Following the transaction, Forestar expects to maintain a solid balance sheet and ample liquidity. This acquisition is expected to be accretive to Forestar’s earnings in the first full year of ownership.

3 of 5

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

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

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
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!


DOW 17,924.96 +120.16 0.67%
S&P 500 2,074.51 +3.86 0.19%
NASDAQ 4,774.3040 +8.9240 0.19%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

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