Abraxas Petroleum acquires remaining 52% stake Abraxas Energy Partners

Abraxas Petroleum Corporation, an independent natural gas and crude oil exploration and production company, has acquired the remaining 52% stake in Abraxas Energy Partners, L.P., an explorer, developer, and producer of oil and gas properties. Both the companies are based in the US.

Pursuant to the terms of the transaction, the unitholders of Abraxas Energy will receive 4.25 shares of Abraxas Petroleum common stock for each common unit of Abraxas Energy. A total of 26.2 million shares of Abraxas Petroleum common stock will be issued in connection with the transaction.

Update on June 30, 2009:

Abraxas Petroleum has entered into a definitive agreement to acquire the remaining 52% stake in Abraxas Energy.

Announcement (June 18, 2009):

Abraxas Petroleum has entered into a letter of intent to acquire the remaining 52% stake in Abraxas Energy.

Under the terms of the transaction, Abraxas Petroleum will acquire the remaining common shares of Abraxas Energy at a price of $6 per share in exchange of Abraxas Petroleum's common shares. The number of shares of Abraxas Petroleum common stock will range from 4.25 to 6 per common unit of Abraxas Energy and will amount to 26 - 36 million shares of Abraxas Petroleum common stock. The share range equates to $1 to $1.41 per share of Abraxas Petroleum and will be determined based on the 20-day trading average prior to a special meeting of Abraxas Petroleum stockholders.

Jackson Walker LLP is acting as legal advisor to Abraxas Petroleum. Stephens, Inc. is acting as financial advisor and Cox Smith Matthews is acting as legal advisor to the special committee of Abraxas Petroleum's Board of Directors. Stifel, Nicolaus & Company, Incorporated is acting as financial advisor, while Vinson & Elkins LLP is acting as legal advisor to Abraxas Energy.

Deal Value (US$ Million) 45.59
Deal Type                Acquisition
Sub-Category             Majority Acquisition
Deal Status              Completed: 2009-10-05

Deal Participants

Target (Company)   Abraxas Energy Partners L.P.
Acquirer (Company) Abraxas Petroleum Corporation

Deal Rationale

The transaction would allow the combined entity to increase its drilling activity by reinvesting a greater portion of its cash flow into organic growth projects. In addition it would also allow reducing general and administrative expenses and creating investment opportunity with increased liquidity and a larger public float.

% Acquisition 52%

Related terms: acquisition, advisor, crude oil, energy, exploration, investment, legal, natural gas, oil and gas, petroleum