HOUSTON, April 15 /PRNewswire-FirstCall/ -- Apache
Corporation (NYSE, Nasdaq: APA) and Mariner Energy (NYSE: ME) today
announced that they have entered into a merger agreement that will
combine Apache's global reach and resources with Mariner's track
record of successful deepwater exploration and its resource
potential.
"This is a strategic step and a natural extension into the
deepwater Gulf for Apache," said G. Steven
Farris, Apache's chairman and chief executive officer.
"Mariner provides an exciting new platform for growth in the
deepwater and complements our strengths in the Gulf Shelf and the
Permian Basin. Based on our experience working with the Mariner
team, we also believe the two companies will make an excellent
cultural fit."
"The combination with Apache is an excellent outcome for
Mariner's stakeholders. Our shareholders will be rewarded for
their faith and support in our company with the opportunity to
further benefit from the upside provided from the merger. Our
partners will work with a world-class company with the financial
and technical resources to fully exploit our assets. Our employees
will benefit from the opportunities provided in a
large company with values similar to Mariner's," said
Scott D. Josey, Mariner's chairman,
chief executive officer and president.
Under the agreement, Mariner shareholders will receive, in
aggregate, 0.17043 of a share of Apache common stock and
$7.80 in cash for each outstanding
share of Mariner's common stock, subject to an election feature and
proration. At Apache's closing stock price of $108.06 on April 14,
2010, the transaction values Mariner's shares at
$26.22 per share or approximately
$2.7 billion. Apache also will assume
$1.2 billion in debt.
In February, Mariner produced 63,000 barrels of oil equivalent
(boe) per day from the Gulf Shelf and deepwater, the Permian Basin
and unconventional onshore plays. At year-end 2009, Mariner had
estimated proved reserves of 181 million boe (47 percent liquid
hydrocarbons) as well as unbooked resource potential of 2 billion
boe.
Mariner's deepwater portfolio includes nearly 100 blocks, seven
discoveries in development -- including interests in Lucius and
Heidelberg -- and more than 50 prospects.
"We have considered extending our Gulf
of Mexico operations into the deepwater for a number of
years," Farris said. "This is the right set of assets and the right
time for Apache to expand its deepwater presence.
"Mariner brings an inventory of developments and prospects that
will jump-start our position in the deepwater Gulf; Apache's
financial resources will maximize the value of the portfolio," he
said. "It's the right time because recent advances in seismic
technology and continued enhancements in facilities design have
reduced the risks in one of the world's most prolific oil
exploration basins."
Apache and Mariner teamed up in the 2008 deepwater Geauxpher
discovery and development at Garden Banks 462. "Mariner's skilled,
experienced professionals share our values and sense of urgency,"
Farris said.
In addition to Geauxpher, Apache has drilled several deepwater
discoveries in Egypt and
Western Australia.
Mariner also has more than 240 blocks on the Gulf Shelf and more
than 200,000 net acres across several emerging onshore plays.
"Mariner's Gulf Shelf and Permian assets are both excellent fits
with our existing core areas," Farris said. "These fields provide
strong cash flow, drilling inventory and upside potential."
Earlier this week, Apache announced it will acquire additional
Gulf Shelf assets from Devon Energy Corporation that add production
of 19,000 boe per day with year-end 2009 estimated proved and
probable reserves of 83 million boe across 158 blocks.
Apache's last corporate transaction, with the Phoenix Resource
Companies in 1996, established Apache as an operator in
Egypt and set the stage for the
region to become one of the company's principal growth areas.
"Combining with Mariner enhances Apache's global portfolio,
which is balanced in terms of commodity mix, geography and
geology," Farris said. "This transaction is similar to our earlier
strategic steps, bringing near-term production and cash flow as
well as long-term upside potential from a large acreage position
with identified exploration opportunities."
The transaction is subject to approval by Mariner's shareholders
and customary regulatory approvals. Completion of the transaction
is expected in the third quarter of 2010.
Apache's financial advisers in this transaction were Goldman,
Sachs & Co. and J.P. Morgan Securities. Mariner was advised by
Credit Suisse Securities (USA)
LLC.
Apache Corporation is an oil and gas exploration and production
company with operations in the United
States, Canada,
Egypt, the United Kingdom North
Sea, Australia and Argentina.
Mariner Energy is an independent oil and gas exploration,
development, and production company headquartered in Houston, Texas, with principal operations in
the Permian Basin, Gulf Coast and the Gulf of Mexico. For more information about
Mariner, visit the company's Web site at
www.mariner-energy.com.
NOTE: Apache will conduct a conference call to discuss the
Mariner Energy merger agreement at 9 a.m.
Central time on Thursday, April
15. The call will be webcast from Apache's Web site,
www.apachecorp.com. The webcast replay and podcast will be archived
on Apache's Web site. The conference call will be available for
delayed playback by telephone for one week beginning at
approximately 11 a.m. on April 15. To access the telephone playback, dial
(719) 457-0820 and provide Apache's confirmation code, 3254008.
Additional information about this transaction will be posted on
Apache's Web site, www.apachecorp.com/mariner. Apache also
posts other announcements, updates, investor information and copies
of all press releases on its Web site.
Additional Information
This communication does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote or approval. Apache will file with the Securities
and Exchange Commission ("SEC") a registration statement on Form
S-4 that will include a proxy statement of Mariner that also
constitutes a prospectus of Apache. A definitive proxy
statement/prospectus will be mailed to stockholders of
Mariner. Apache and Mariner also plan to file other documents
with the SEC regarding the proposed transaction. INVESTORS
AND SECURITY HOLDERS OF MARINER ARE URGED TO READ THE PROXY
STATEMENT/PROSPECTUS AND OTHER DOCUMENTS THAT WILL BE FILED WITH
THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED
TRANSACTION. Such documents are not currently
available. Investors and security holders will be able to
obtain the documents (when available) free of charge at the SEC's
web site, www.sec.gov. Copies of the documents filed with the
SEC by Apache will be available free of charge on Apache's website
at www.apachecorp.com under the tab "Investors" or by contacting
Apache's Investor Relations Department at 713-296-6000.
Copies of the documents filed with the SEC by Mariner will be
available free of charge on Mariner's website at
www.mariner-energy.com under the tab "Investor Information" or by
contacting Mariner's Investor Relations Department at
713-954-5558. You may also read and copy any reports,
statements and other information filed with the SEC at the SEC
public reference room at 100 F Street N.E., Room 1580, Washington, D.C. 20549. Please call the SEC at
(800) 732-0330 or visit the SEC's website for further
information on its public reference room.
Apache, Mariner, their respective directors and executive
officers and other persons may be deemed, under SEC rules, to be
participants in the solicitation of proxies from stockholders
of Mariner in connection with the proposed transaction.
Information regarding Apache's directors and officers can be found
in its proxy statement filed with the SEC on March 31, 2010 and information regarding
Mariner's directors and officers can be found in its proxy
statement filed with the SEC on April 1, 2010.
Additional information regarding the participants in the proxy
solicitation and a description of their direct and indirect
interests in the transaction, by security holdings or otherwise,
will be contained in the proxy statement/prospectus and other
relevant materials to be filed with the SEC when they become
available.
Forward-Looking Statements
Statements in this document include "forward-looking
statements" within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. The opinions,
forecasts, projections, future plans or other statements other than
statements of historical fact, are forward-looking statements. We
can give no assurance that such expectations will prove to have
been correct. Actual results could differ materially as a
result of a variety of risks and uncertainties, including: the
timing to consummate the proposed agreement; the risk that a
condition to closing of the proposed agreement may not be
satisfied; the risk that a regulatory approval that may be required
for the proposed agreement is not obtained or is obtained subject
to conditions that are not anticipated; negative effects from the
pendency of the merger; our ability to achieve the synergies and
value creation contemplated by the proposed agreement; our ability
to promptly and effectively integrate the merged businesses; and
the diversion of management time on agreement-related issues.
Other factors that could materially affect actual results are
discussed in Apache's and Mariner's most recent 10-Ks as well as
each company's other filings with the SEC available at the SEC's
website at www.sec.gov. Actual results may differ materially
from those expected, estimated or projected. Forward-looking
statements speak only as of the date they are made, and we
undertake no obligation to publicly update or revise any of them in
light of new information, future events or otherwise.
APA-G
SOURCE Apache Corporation