Looks like they'll be spending plenty of money.
http://dealbook.blogs.nytimes.com/2010/07/28/hess-to-acquire-american-oil-gas/?partner=yahoofinance Hess Corporation, a United States energy company, said Tuesday that it would acquire the independent American Oil & Gas in an all-stock deal worth about $445 million as it expands its holdings in the Bakken oil play of North Dakota by around 85,000 acres.
The agreement sees Hess issuing 0.1373 shares of common stock for every outstanding share of common stock in American Oil & Gas — a 9.4 percent premium to American Oil & Gas’s stock price at the close of trading Tuesday.
Hess outlined in its 2009 annual report its intention to invest about $1 billion per year in the Bakken oil fields over the next five years, greatly increasing productivity in the area. The corporation already holds a acreage position in the Bakken shale development of about 510,000 acres.
“This acquisition builds upon our strong land position in the Bakken, leverages our nearby infrastructure and offers operational synergies,” Hess’s president of worldwide exploration and production, Greg Hill, said in a press release.
Hess said it had committed $30 million in working capital credit to American Oil & Gas to finance its target’s intended exploration and production, as well as other needs that would arise before the transactions close.
The deal still needs to meet customary closing conditions, and is subject to approval of American Oil & Gas’s shareholders.
