Source: Toreador Resources
Toreador Resources Corporation (NASDAQ: TRGL) and ZaZa Energy, LLC, a privately held oil and gas company based in Houston, Texas, have signed a definitive agreement to combine the companies. The combined portfolio comprises three areas – the Eagle Ford core and the emerging Eagle Ford/Woodbine (Eaglebine) resource plays in Texas and the Paris Basin in France with a current total of 423,000 net acres.
Both the Eagle Ford and Paris Basin businesses have strategic partnerships with subsidiaries of Hess Corporation. Based on the closing share price of Toreador on Tuesday, August 9, 2011, the implied market capitalization for the combined company is approximately $294 million.
Under the terms of the transaction, ZaZa equity holders will receive approximately 76.2 million shares, representing 75 percent of the new company, ZaZa Energy Corporation (the “Company”), as well as $50 million in notes or cash. Toreador stockholders will receive approximately 25.4 million shares, representing 25 percent of the new Company. The transaction has been unanimously approved by the Toreador Board of Directors and the equity holders of ZaZa.
The Company will be headquartered in Houston, Texas, with offices in Corpus Christi, Texas and Paris, France, and is expected to trade on the NASDAQ under the stock ticker symbol “ZAZA”. The transaction is subject to Toreador stockholder approval, regulatory approvals and other customary closing conditions. The transaction is expected to close in the fourth quarter of 2011.
In the Eagle Ford core, ZaZa holds 123,000 gross acres; the joint venture work program forecasts over 280 wells drilled by the end of 2013. In the Eaglebine, leasing is underway to expand the existing 70,000 gross acres to over 100,000 gross acres within the next 12 months. ZaZa has been in discussions with potential joint venture partners for the Eaglebine acreage and plans to spud a first well by the first quarter of 2012. In the Paris Basin, a one-rig oil exploration drilling program targeting traditional reservoirs is expected to commence by late 2011. The Liassic drilling program comprising six wells (without the use of hydraulic fracturing) is expected to commence by year-end pending final review of permits by the French Administration.
Net production in the Eagle Ford core and the Paris Basin is expected to exceed 1,100 boe/d by year-end 2011, increasing to 5,000 boe/d by the end of 2013, which does not include any contribution from future drilling in the Eaglebine, Paris Basin conventional or Liassic.
Toreador Resources merges with ZaZa combining Eagle Ford and Paris Basin Shale plays
Source: Toreador Resources