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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
Current Report Pursuant
to Section 13 or 15 (d) of the
Securities Exchange Act of 1934
Date of Report May 23, 1995 (Date of Earliest Event Reported May 9, 1995)
EL PASO NATURAL GAS COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN THE CHARTER)
Incorporated in the State of Delaware
(State or other Jurisdiction of Incorporation)
1-2700 74-0608280
(Commission File Number) (I.R.S. Employer Identification No.)
One Paul Kayser Center
100 North Stanton Street, El Paso, Texas 79901
(Address of Principal Executive Offices) (Zip Code)
Telephone (915) 541-2600
(Registrant's Telephone Number, Including Area Code)
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Item 5. Other Events
On May 9, 1995, El Paso Natural Gas Company (the "Company") executed a
definitive merger agreement with Eastex Energy Inc. ("Eastex") under
which holders of Eastex common stock will receive $4.50 per share in
either common stock of the Company (subject to a maximum and minimum
exchange ratio of 0.1629 and 0.1485, respectively) or in cash, at
their option, with a maximum of 49 percent of the merger consideration
being paid in cash. The merger is conditioned upon, among other
things, approval by the holders of a majority of the outstanding
shares of Eastex common stock, the transaction being tax-free to
Eastex and its shareholders (except to the extent they receive cash),
and receipt of certain governmental approvals. A copy of the press
release further describing the transaction is attached hereto as
Exhibit 99 and is incorporated herein by reference.
Item 7. Financial Statements, Pro Forma Financial Information, and Exhibits
Exhibits.
99 Press release dated May 9, 1995.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
El Paso Natural Gas Company
(Registrant)
By /s/ Thomas E. Ricks
Thomas E. Ricks
Vice President, Controller and
Chief Accounting Officer
Date: May 23, 1995
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EXHIBIT INDEX
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Exhibit No. Description
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99 Press release dated May 9, 1995.
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[EL PASO NATURAL GAS COMPANY LETTERHEAD]
FOR IMMEDIATE RELEASE
EL PASO NATURAL GAS COMPANY
TO ACQUIRE EASTEX ENERGY INC.
EL PASO AND HOUSTON, TEXAS, MAY 9, 1995 - El Paso Natural Gas Company
(NYSE:EPG) and Eastex Energy Inc. (NASDAQ:ETEX) jointly announced today the
execution of a definitive merger agreement which provides for the merger of
Eastex Energy Inc. with a subsidiary of El Paso Natural Gas Company. Eastex
Energy Inc. is a full-service natural gas marketing company based in Houston
that markets over 900 million cubic feet of gas per day, primarily to
commercial, industrial and utility users in the Gulf Coast, Southeast,
Northeast, and Midwest regions of the United States. The net value of the
transaction is approximately $31 million.
In the merger, holders of Eastex Energy common stock will receive
$4.50 per share in either common stock of El Paso Natural Gas (subject to a
maximum and minimum exchange ratio of 0.1629 and 0.1485 El Paso shares,
respectively) or in cash, at their option, with a maximum of 49% of the merger
consideration being paid in cash. Following the merger, Eastex Energy will be a
wholly owned subsidiary of El Paso Natural Gas Company. The merger is
conditioned upon, among other things, approval by the holders of a majority of
the outstanding shares of Eastex Energy common stock, the transaction being
tax-free to Eastex Energy and its shareholders (except to the extent they
receive cash) and receipt of certain governmental approvals.
In connection with the execution of the merger agreement, El Paso
Natural Gas has entered into an option and voting agreement with Mr. Robert G.
Phillips, Chairman and Chief Executive Officer of Eastex Energy, pursuant to
which he has agreed to vote all of his 2.4 million Eastex shares in favor of
the merger. EL Paso Natural Gas has also received voting or option agreements
with respect to approximately 950,000 additional Eastex shares and warrants.
The merger agreement also provides for the payment of a $1 million termination
fee and reimbursement of El Paso Natural Gas Company's expenses under certain
circumstances.
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The merger is expected to close in the third quarter of 1995.
Following the close, El Paso Natural Gas Company intends to combine the
operations of its existing wholly owned gas marketing subsidiary, El Paso Gas
Marketing Company, with those of Eastex Energy. El Paso Gas Marketing Company
currently markets approximately 300 million cubic feet of gas per day,
primarily to markets in the Southwestern United States.
"Combining El Paso Gas Marketing's existing operations with Eastex
will result in a four-fold increase in El Paso's average gas marketing volume
to over 1.2 billion cubic feet of natural gas per day," said William A. Wise,
Chairman, President and Chief Executive Officer of El Paso Natural Gas Company.
"The complementary fit between El Paso Gas Marketing Company's activities in
the Southwest with Eastex's activities in the Southeast, Northeast, and Midwest
creates a truly national gas marketer and represents an important step in the
continued growth of El Paso's non-regulated operations."
"We are pleased to announce that Eastex is joining forces with El Paso
Natural Gas and El Paso Gas Marketing Company to expand our gas marketing
operations and provide our customers with greater merchant services in the
years ahead," said Robert G. Phillips, Chairman and Chief Executive Officer of
Eastex Energy. "We view El Paso as one of the industry's premier natural gas
companies and believe this combination will not only benefit our shareholders,
employees and customers but also accelerate our growth strategy to become one
of the nation's leading natural gas service providers."
El Paso Natural Gas Company owns and operates one of the nation's
largest field and mainline natural gas transmission systems, connecting natural
gas supply regions in New Mexico, Texas, Oklahoma, and Colorado to markets in
California, Nevada, Arizona, New Mexico, Texas, and Mexico.
Eastex Energy Inc., through its various subsidiaries, is a natural gas
merchant specializing in the purchase, gathering, transportation, storage and
sale of natural gas on a nationwide basis.
Contacts: El Paso Natural Gas Company
Ms. Norma F. Dunn (915) 541-5443
Eastex Energy Inc.
Mr. Robert G. Phillips (713) 650-6255
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