SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 16, 1997
THE LOUISIANA LAND AND EXPLORATION COMPANY
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(Exact name of registrant as specified in its charter)
Maryland 1-959 72-024470
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(State or othe (Commission (I.R.S. Employer
Jurisdiction ) File Number) Identification No.)
of incorporation)
909 Poydras Street
New Orleans, Louisiana 70112
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 504-566-6500
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Item 5. Other Events
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On July 17, 1997, the registrant issued a press release
announcing that the registrant and Burlington Resources Inc. ("BR")
had entered into an Agreement and Plan of Merger (the "Merger
Agreement") dated as of July 16, 1997. The consummation of the
transactions contemplated by the Merger Agreement are subject to
the approval of the stockholders of each of the registrant and BR.
For additional information regarding the transactions contemplated
by the Merger Agreement, reference is made to the press release, a
copy of which is attached hereto as Exhibit 99 and is incorporated
herein by reference.
Item 7. Financial Statements and Exhibits
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Exhibit No. Description
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99 Press Release dated July 17, 1997
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SIGNATURE
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.
THE LOUISIANA LAND AND
EXPLORATION COMPANY
Date: July 17, 1997 By /s/Frederick J. Plaeger, II
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Name: Frederick J. Plaeger, II
Title: Vice President, General
Counsel and Corporate
Secretary
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EXHIBIT INDEX
Number Description Page
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99 Press Release
dated July 17, 1997 5
BURLINGTON RESOURCES AND LOUISIANA LAND TO COMBINE
IN TRANSACTION VALUED AT $3 BILLION
- -- Combination Accelerates BR's Strategic Transformation
To a More Exploration-Oriented Company --
- -- Establishes "Super-Independent" E&P Company with Proved Reserves of
7.7 TCFE, 50/50 Balance Between Exploration and Development and
Major Presence in Key Domestic and International Plays --
HOUSTON and NEW ORLEANS, July 17, 1997 -- Burlington Resources Inc. ("BR")
(NYSE: BR), of Houston, and The Louisiana Land and Exploration Company
("LL&E") (NYSE: LLX), of New Orleans, today announced that they have signed
a definitive agreement to combine in a $3 billion transaction establishing
the combined enterprise as the nation's foremost independent energy
exploration and production (E&P) company.
As of December 31, 1996, the two companies on a combined basis had the
largest domestic gas reserves -- 5.9 TCF (trillion cubic feet), and
production -- 1.5 BCF/D (billion cubic feet per day) of the E&P group, and
had total reserves of 8.1 TCFE (trillion cubic feet equivalent). Currently,
the companies, on a combined basis, have total reserves of 7.7 TCFE, which
takes into account BR's recent non-strategic divestitures and LL&E's recent
reserves additions. It is also anticipated that additional proven reserves
will be booked prior to year-end on certain of the LL&E properties. Current
combined worldwide gas production is 1.7 BCF/D, liquids production is
approximately 90,000 barrels per day; operating cash flow is approximately
$1 billion per year; and equity market capitalization is about $8.2 billion.
The combined company's global asset base, financial resources, opportunity
mix and technological talent will position it as the leader in value creation
among independent E&P companies worldwide. It is anticipated that the
transaction will be accretive to cash flow per share in 1997 and beyond and
create a pathway for rapid growth in net asset value.
(more)
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Under terms of the agreement, which was unanimously approved by the Boards of
Directors of both companies, LL&E will merge with a subsidiary of BR in an
exchange of stock in which LL&E shareholders will receive shares of BR based
on a fixed exchange ratio of 1.525 BR shares for each LL&E share held. The
transaction is expected to be accounted for as a pooling of interests and to
qualify as a tax-free reorganization. Based on BR's closing price of $46.125
on Wednesday, July 16, 1997, the 35.9 million LL&E shares on a fully diluted
basis, and the assumption by BR of approximately $500 million of LL&E debt,
the transaction has a total value of approximately $3 billion. It is
expected that the transaction will be completed in approximately three months.
Bobby S. Shackouls, Chairman, President and Chief Executive Officer of
Burlington Resources, said: This strategic business combination creates a
new kind of E&P company--a super-independent. LL&E's corporate
culture and dedication to the creation of shareholder value are very
complementary to the manner in which we manage our business. The combined
enterprise will be well-balanced, with a diverse asset base and
substantial potential for further sizeable reserve, production and net asset
value growth. The transaction completes the transformation of BR that began
several years ago from a pure acquisition and exploitation company to a more
exploration-oriented company. BR's significant financial strength and vast
portfolio of low-risk exploitation projects will provide the funding for a
growing, successful exploration program substantially enhanced by the
addition of LL&E's domestic and international property base, prospect
inventory and exploratory mindset. For instance, it is expected that BR's
financial strength, marketing expertise and engineering skills should permit
the combined company to more quickly and cost-effectively exploit LL&E's
Madden property. Furthermore, BR's financial resources and the combined
companies' acreage position in the deepwater Gulf of Mexico should create
critical mass in a world-class exploratory province that has the capacity to
significantly increase net asset value and cash flow. LL&E's core domestic
assets are complementary to BR's key operations in the United States and the
merging of those assets will generate both increased opportunities and
operating efficiencies for the new company.
(more)
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"Moreover," Mr. Shackouls said, "BR's desire to develop a significant
international presence is fulfilled by LL&E's activities in several world-
class exploration areas, most notably Algeria, Venezuela and the North
Sea. LL&E's expertise in the exploration sector and its international
experience will enhance BR's growing exploratory focus. BR's recognized
engineering, operational and financial strengths will generate substantial
additional value from the LL&E property base. The combination of BR's
longer-lived gas reserves with LL&E's short-lived reserve base will result
in an optimal reserve life of about ten years, with a well-balanced 75%/25%
mix between gas and oil production."
H. Leighton Steward, Chairman, President and Chief Executive Officer of LL&E,
said: "This strategic combination of our two strong companies will provide
increased value by ensuring that the very large, capital-intensive
opportunities LL&E has amassed will be fully exploited in the most timely
and efficient manner. It is also anticipated that there will be substantial
cost savings and operating synergies. By joining forces with BR, we become
part of a new enterprise exceptionally well positioned in terms of the
skills of its people, its assets and its capabilities and, we believe,
enjoying upside growth and earnings potential well beyond what either
company could achieve on a standalone basis. It has become increasingly
evident in our talks with BR that LL&E and BR share a common vision of the
ideal 21st century independent.
With this transaction, we are making that vision a reality."
The new BR will have significant strategic positions domestically in the San
Juan Basin, the Mid-continent area, and the Gulf Coast region both onshore
and offshore. Although more than 90 percent of its current proved reserves
will be located in the United States, the new company will control a number
of highly promising international plays, adding to its long-term reserve and
production potential. It will have an outstanding land position of nearly
15 million acres. BR's very large fee mineral holdings will be further
enhanced by LL&E's position as the largest fee land owner in South Louisiana.
The recent efforts of both companies to exploit and explore these high-
quality, perpetually owned land positions will be advanced by the synergies
created through this merger.
(more)
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The combined company will have a powerful financial profile capable of
supporting an aggressive, growth-oriented capital program that is global in
scope. It will have a very strong balance sheet, with long-term
debt comprising 40% of the book capitalization of the company and current
cash and short-term investments totaling about $500 million.
Upon completion of the transaction, Mr. Shackouls will be Chairman, President
and Chief Executive Officer of the combined company, which will be known as
Burlington Resources and will be headquartered in Houston. Mr. Steward will
be the company's Vice Chairman as well as Chairman of the Executive Committee
of the Board. Members of both BR's and LL&E's management team will be
integral to the leadership of the new company. The Board of Directors will
comprise twelve members, including Mr. Steward and two additional members to
be nominated by LL&E.
The transaction is subject to shareholder and regulatory approval, including
expiration of the applicable waiting period under the Hart-Scott-Rodino Act,
and other customary closing conditions.
BR intends to file a registration statement with the Securities and Exchange
Commission covering the shares of common stock to be issued in connection
with the proposed merger. The offering of shares will only be by
means of the registration statement and related prospectus.
BR was advised by Morgan Stanley & Co. Incorporated with regard to the
transaction and LL&E was advised by Dillon, Read & Co. Inc. and Merrill Lynch
& Co.
Information on Forward-Looking Statements
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This press release contains projections and other forward-looking statements
within the meaning of section 21E of the Securities and Exchange Act of 1934.
These projections and statements reflect the two companies' current views
with respect to future events and financial performance. No assurances can
be given, however, that these events will occur or that these projections
will be achieved and actual results could differ materially from those
projected as a result of certain factors. A discussion of these factors is
included in the companies' periodic reports filed with the Securities and
Exchange Commission.
# # #
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Investor/Analyst Contacts: Burlington Resources
James Leahy
713-624-9364
The Louisiana Land and Exploration Company
Al Petrie
504-566-6478
Media contact: Roy Winnick
Kekst and Company
212-521-4842
