Energy Partners

(EPL)

and

Stone Energy

(SGY)

, two Louisiana-based oil and gas companies, have agreed to merge in a deal worth $2.2 billion, including debt.

The arrangement will see Energy Partners pay $51 in cash or stock, at the election of the shareholder, for each share of Stone Energy. Stone terminated its merger agreement with

Plains Exploration

(PXP)

on Thursday.

The buyout price values Stone's equity at $1.4 billion, while the total amount reflects Energy Partners' plan to refinance roughly $800 million of the company's debt. The transaction should close early in the fourth quarter, and Energy Partners expects annual cost savings of around $55 million.

Had the companies been combined last year, the business would have been the third-most active driller of operated wells on the Gulf of Mexico shelf. Energy Partners, founded in 1998, is based in New Orleans. Stone's headquarters are located in Lafayette.

Shares of Energy Partners rose $1.06, or 5.9%, to $19.08, and Stone tacked on 86 cents, or 1.9%, to $47.09. Plains was up $1.67, or 4.7%, at $36.87.

The Stone deal was just one component of an active day for mergers in the energy patch, as separately,

Anadarko

(APC) - Get Report

laid out plans to buy

Kerr-McGee

(KMG)

in a $16 billion transaction and

Western Gas Resources

( WGR) for $4.7 billion.