<PAGE> 1
Filed by Stone Energy Corporation pursuant to
Rule 425 under the Securities Act of 1933 and
deemed filed pursuant to Rule 14a-12 of the
Securities Act of 1934
Stone Energy Commission File No.: 001-12074
Basin Exploration Commission File No.: 000-20125
Subject Company: Basin Exploration Inc.
THE FOLLOWING IS A SLIDE PRESENTATION USED BY STONE ENERGY IN CONNECTION WITH
INVESTOR AND ANALYST PRESENTATIONS.
Slide 1 [Stone Energy Corporation Logo]
Slide 2 [Safe Harbor Language]
PRIVATE SECURITIES LITIGATION REFORM ACT SAFE HARBOR STATEMENT
Except for the historical and present factual information contained herein, the
matters set forth in this presentation, including statements as to the expected
benefits of the merger such as efficiencies, cost savings, market profile and
financial strength, and the competitive ability and position of the combined
company, and other statements identified by words such as "expects," "projects,"
"plans," and similar expressions are forward-looking statements within the
meaning of the "safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements are subject to risks and
uncertainties that may cause actual results to differ materially, including the
possibility that the anticipated benefits from the merger cannot be fully
realized, the possibility that costs or difficulties related to the integration
of our businesses will be greater than expected, the impact of competition and
other risk factors relating to our industry as detailed from time to time in
each of Stone's and Basin's reports filed with the SEC. Stone and Basin disclaim
any responsibility to update these forward-looking statements.
Slide 3 [The Stone Strategy]
Listing of Following Bullets:
--Acquire Properties with Specific Characteristics:
--Primarily Gulf Coast Basin Location
--Established Production history, existing infrastructure & low level
of production at time of acquisition
--Multiple productive sands and Reservoirs
<PAGE> 2
Slide 4 [Stone Energy Net Remaining Reserves]
The following information regarding proved reserves (Bcfe) appears via bar
chart:
1996 - 220.9
1997 - 295.8
1998 - 354.1
1999 - 387.7
Bar charts also display proved reserves by category as follows:
PDP PDNP PUD
1996 - 24% 51% 25%
1997 - 34 43 23
1998 - 35 48 17
1999 - 30 50 20
Slide 5 [The Stone Strategy]
Listing of Following Bullets:
--Acquire properties with specific characteristics
--Primarily Gulf Coast Basin location
--Established Production history, existing infrastructure & low level
of production at time of acquisition
--Multiple productive sands and reservoirs
--Opportunity to operate property to better control the
timing and cost of field rejuvenation activities
Slide 6 [Low Cost Structure & High Operating Margins]
The following information appears via bar chart:
Cash
Revenues per Mcfe Percentage Expense Percentage
-------------------------------------------------------
1995 $2.30 64.8% 35.2%
1996 2.87 66.9 33.1
1997 2.92 68.2 31.8
1998 2.27 67.4 32.6
1999 2.49 69.0 31.0
1Q00 3.09 74.0 26.0
2Q00 3.63 77.0 23.0
3Q00 4.18 78.0 22.0
<PAGE> 3
Slide 7 [The Stone Strategy]
Listing of Following Bullets:
--Acquire properties with specific characteristics
--Increase production, cash flow & reserves through exploration &
development activities
Slide 8 [Production Up 560% Since 1993]
The following information appears in MMcfe via bar chart:
<TABLE>
<CAPTION>
Oil Production Gas Production Cumulative Daily
Daily Production Per Day Per Day Rate at Acquisition
-----------------------------------------------------------------------
<S> <C> <C> <C> <C>
1993 30.3 16.7 13.6 3.342
1994 36.5 18.3 18.2 3.342
1995 46.0 23.0 23.0 9.246
1996 53.3 22.3 31.0 15.780
1997 65.0 26.1 38.9 23.148
1998 138.5 47.3 91.2 23.148
1999 161.4 57.3 104.1 28.348
1Q00 169.7 49.8 119.9 28.348
2Q00 181.0 58.4 122.6 28.348
3Q00 189.2 55.8 133.4 28.348
Current 2000 200.0 59.0 141.0 28.348
</TABLE>
Listing of following bullets also appear with bar chart:
- '99 avg. up 17% over '98 avg.
- 3rd Qtr. 2000 avg. up 17% from '99 avg.
- Current Production up 24% from '99 avg.
<PAGE> 4
Slide 9 [Cash Flow Increased 658% Since 1993]
The following information regarding cash flow from operations ($MM) appears via
bar chart:
1993 $17.9
1994 17.9
1995 25.0
1996 37.3
1997 47.2
1998 77.2
1999 101.3
9 mos.2000 135.6
First Call Estimates
Full year 2000 186.7 (as of 11/06/00) up 84%
Slide 10 [We've Grown Reserves 308% Since IPO]
The following information regarding proved reserves (Bcfe) appear via bar chart
Total Reserves Oil(Bcfe) Gas(Bcfe) Percent Gas
-------------- --------- --------- -----------
1993 95.0 36.5 58.5 62%
1994 107.0 38.7 68.3 64
1995 129.1 47.9 81.2 63
1996 220.9 76.6 144.3 65
1997 295.8 106.6 189.2 64
1998 354.1 110.8 243.3 69
1999 387.4 135.8 251.6 65
Information in bullet format is as follows:
Over last three years averaged:
100 Bcfe reserves adds per year
Reserve replacement ratio of 263%
Six year CAGR of 26% from:
66% drilling & 34% acquisitions
Slide 11 [The Stone Strategy]
Listing of Following Bullets:
--Acquire properties with specific characteristics
--Increase production, cash flow & reserves through exploration & development
activities
--Consistent focus on detailed field studies to search for oil and gas in the
Gulf Coast Basin
<PAGE> 5
Slide 12 [2000 Planned Drill Wells]
The following information regarding number of planned wells for 2000 was given
via graphic illustration:
Depth(feet) Number of Wells
-----------------------------------
3,000 - 10,000 7
10,000 - 14,000 14
14,000 - 16,000 7
16,000 - 18,000 3
Slide 13 [Capital Expedatures]
The following information regarding capital expenditures ($MM) was provided via
bar chart:
Acquisitions Development Exploration Total
-------------------------------------------------------------------
1995 $8.1 $29.2 $8.2 $45.5
1996 26.7 26.4 26.3 79.4
1997 43.8 47.2 57.8 148.8
1998 13.0 64.1 81.8 158.9
1999 31.0 60.8 32.1 123.9
00B N/A N/A N/A 165.1
Slide 14 [Net Income Share]
The following information regarding net income per share was provided via bar
chart:
Net Income Per Share
--------------------
1993 $0.88
1994 0.34
1995 0.49
1996 0.90
1997 0.78
1998 0.39(1)
1999 1.58
9 mos. 2000 2.89
First Call Estimates Full Year 2000 4.06(2)
(1)Excludes ceiling test write down of $3.82
(2)As of 11/06/00
<PAGE> 6
Slide 15 [Profitable Investments]
Displays data in tabular form ($MM) as follows:
Company Totals
(Dollars in Millions)
Acq. Expl. & Net Remaining Remaining
Cost(a) Dev. Cost(a) Revenues(a) Proved Bcfe(b) Projects
------- ------------ ----------- -------------- --------
$164.6 $589.6 $561.2 387.4 122
(a) Based on results from 1990 (the year the acquisition &
exploitation strategy was adopted) through 9/30/00
(b) Based on 12/31/99 Independent Engineers Report
Slide 16 [Stone Energy Growth Alternatives]
Provides following bullet points:
- Prospect Inventory drilling
- Acquisitions & farmins of onshore & offshore properties
- Consolidations - Mergers
Slide 17 [Stone Energy Corporation Logo with Basin Exploration Logo]
Slide 18 [Transaction Summary]
Listing of Following Bullets:
--Structure: Stock-For Stock; Pooling; Tax-Free
--Exchange Ratio: .3974 of a Stone Share per Basin Share
--Premium: 10% One day prior; 14% 30-day average
--Targeted Closing: Early 2001
Slide 19 [Acquisition Rationale]
Listing of Following Bullets:
--Increased size and financial strength
--Solid foundation of combined proved reserves
--Expanded portfolio of prospects in our core area, the Gulf Coast Basin
--GOM property proximity yields technical, operational and infrastructure
synergies
--Financially compelling
Statement at bottom of slide: "New Growth Opportunities as Combined Entity"
<PAGE> 7
Slide 20 [Complementary Exploration Expertise]
Describes combination of Stone's strengths of detailed field analysis and
exploration of mature fields with Basin's strengths of new lease prospect
generation.
Listing of following bullets related to the combined company:
--Unlock value in combined property base
--43 producing properties
--52 unexplored primary term leases
--Inventory of 179 identified prospects
--Leverage leasehold positions
Statement at the bottom of the slide: "Enhance Combined Asset Value"
Slide 21 [Stone Energy, Peer Group, S&P 500 and Oil/Gas Prices]
Line Graph Comparing Stone Energy stock price performance over the period 7/9/93
- 11/3/00 to the stock price performance of Stone's Peer Group, the S&P 500
Index and Oil & GAS prices. Stone Energy's stock price displays a CAGR of 25%
since its IPO (7/09/00).
A list of Stone Energy's Peer Group is listed as follows:
The companies that comprise the Company's current Peer Group are as follows:
Barrett Resources Corporation, Basin Exploration, Cabot Oil & Gas, Chieftain
International, Cross Timbers Oil Company, Devon Energy, Forest Oil, Houston
Exploration, The Meridian Resource Corp., Newfield Exploration, Ocean Energy,
Pogo Producing Company, Snyder Oil Corporation, St. Mary Land, Swift Energy, Tom
Brown Inc., Vintage Petroleum Inc.
Slide 22 [The Stone Strategy]
Listing of Following Bullets:
--Acquire properties with specific characteristics
--Primarily Gulf Coast Basin location
--Established Production history, existing infrastructure & low level
of production at time of acquisition
--Multiple productive sands and reservoirs
--Opportunity to operate property to better control the timing and
cost of field rejuvenation activities
Slide 23 [Stone Area of Operations]
Depicts map of Gulf Coast Basin identifying the location of Stone's 21 producing
properties.
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Slide 24 [Combined Property Base]
Depicts map of Gulf Coast Basin identifying the location of Stone's 21 producing
properties and Basin's 22 producing properties.
The following information regarding pro forma proved reserves at 12/31/99 was
shown in tabular form:
Bcfe % Total % Gas
---- ------- -----
Gulf Coast Basin
Onshore 96 16% 28%
Offshore 426 71 79
Rocky Mountain 75 13 32
--- ---
Total 597 100% 65%
Slide 25 [Stone Exploration Leases]
Depicts map of Gulf Coast Basin identifying the location of Stone's 5
exploratory leases, Stone's 21 producing properties and Basin's 22 producing
properties.
Slide 26 [Increased Exploration Portfolio]
Depicts map of Gulf Coast Basin identifying the location of Stone's 5
exploratory leases, Basin's 48 exploratory leases, Stone's 21 producing
properties and Basin's 22 producing properties.
Depicts map of Western United States with portions of Wyoming, Utah, Colorado,
New Mexico and Arizona highlighted to identify Basin's Rocky Mountain interests.
Slide 27 [Impressive Growth]
The following information regarding cash flow From operations ($MM) appears via
bar chart:
--Stone Actual Cash Flow from Operations
--1996 $ 37
--1997 $ 47
--1998 $ 77
--1999 $101
--Pro Forma Cash Flow From Operations
--1999 $153
--2000 $300
--Arrow on the bar graph depicts a compounded annual growth rate of
cash flow from operations of 40% for Stone from 1996-1999.
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--Arrow on the bar graph depicts a 96% growth in cash flow from
operations from 1999 to 2000e for the pro forma company.
--Statement at the top of the graph states: "2001 Projection
Pro Forma Growth over 20%"
The following information regarding Production (Bcfe) appears via bar chart:
--Stone Actual Production
--1996 19.5
--1997 23.7
--1998 50.5
--1999 57.6
--Pro Forma Production
--1999 91.5
--2000 100.6
--Arrow on the bar graph depicts a compounded annual growth rate of
production of 44% for Stone from 1996-1999.
--Arrow on the bar graph depicts a 11% growth in production from 1999
to 2000e for the pro forma company.
--Statement at the top of the graph states: "2001 Projection
Pro Forma Growth over 15%"
--Statement at the bottom of slide states: "Significant Cash Flow &
Production Growth"
Slide 28 [Strengthened Competitive Position]
The following information appears via bar charts:
--Market Capitalization($MM)(10/27/00)(1)
--APA 6660.2
--OEI 2373.9
--NBL 1983.0
--NFX 1571.9
--PF SGY 1408.6
--FST 1289.3
--PPP 1004.6
--SGY 1000.5
--SKE 806.5
--THX 675.2
--BSNX 362.2
--TMR 328.0
--CID 318.2
--EEX 207.1
--MMR 188.4
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--2001 Discretionary Cash Flow($MM)(2)
--APA 1589.2
--OEI 702.8
--NBL 514.4
--PF SGY 402.2
--NFX 369.1
--FST 354.6
--SGY 256.5
--THX 233.2
--PPP 220.0
--EEX 140.2
--BSNX 138.9
--SKE 137.7
--TMR 135.0
--CID 85.6
--MMR 32.2
--Total Debt to Book Capitalization(1)
--MMR 0.0%
--SKE 6.0%
--CID 6.6%
--BSNX 18.3%
--PF SGY 23.4%
--SGY 25.0%
--NFX 26.7%
--NBL 41.3%
--APA 41.7%
--THX 44.1%
--PPP 45.2%
--FST 50.0%
--EEX 51.0%
--TMR 57.7%
--OEI 60.0%
Reserves (Bcfe)(1)
--APA 4843.0
--OEI 2490.0
--NBL 1995.3
--FST 1408.1
--PPP 847.4
--PF SGY 596.9
--NFX 594.8
--THX 541.0
--SGY 387.4
--EEX 375.5
--TMR 364.6
--CID 239.6
--BSNX 209.5
--SKE 104.5
--MMR 94.0
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Statement at the bottom of the slide: "Well Positioned for Future Opportunities"
(1) Publicly available data as of October 27, 2000
(2) I/B/ES estimates as of October 27, 2000. Stone pro forma estimates provided
by Stone Management.
Slide 29 [Attractive Proved Reserve Economics]
Depicts two tables with the following information:
Compelling Economics
-- At $3.50/mcf and $25.00/Bbl, acquired proved reserves produce:
-- 4 year payout
-- 14% rate of return
Hedging Program Reduces Price Risk
-- 2001 and 2002 volumes
-- Puts at $3.50/McF and $25.00/Bbl
-- 28% of pro forma production volumes
-- Estimated cost - $25 MM
Slide 30 [Proved Reserves by Category]
Depicts bar graph of proved reserves (Bcfe) by category for Stone, Basin and
Stone Pro Forma at 12/31/99
PDP PDNP PUD Total
Stone 114.8 196.9 75.7 387.4
Basin 94.5 54.7 60.4 209.6
Stone Pro Forma 209.3 251.6 136.1 597.0
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Slide 31 [Stone's Strategy Should Continue to Work]
List following bullet points:
Compared to our recent past, we have:
- More people & Gulf Coast knowledge
- More properties & infrastructure
- More cash flow
- Better technology
- Less Debt
- An increasing supply of opportunities
Slide 32 [Forward-Looking Statements]
Certain statements in this presentation are forward-looking and are based upon
the Company's current belief as to the outcome and timing of future events. All
statements other than statements of historical facts included in this
presentation regarding budgeted capital expenditures, increases in oil and gas
production, the Company's outlook on oil and gas prices, oil and gas reserve
estimates, business strategy and other plans and objectives for future
operations, are forward-looking statements. Important factors that could cause
actual results to differ materially from those in the forward-looking statements
herein include the timing and extent of changes in commodity prices for oil and
gas, operating risks and other risk factors as described in the Company's Annual
Report on Form 10-K as filed with the Securities and Exchange Commission. Should
one or more of these risks or uncertainties occur, or should underlying
assumptions prove incorrect, the Company's actual results and plans could differ
materially from those expressed in the forward-looking statements.
ADDITIONAL INFORMATION. Stone and Basin will file a proxy statement/prospectus
and other relevant documents concerning the proposed merger transaction with the
SEC. INVESTORS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS WHEN IT BECOMES
AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION. You will be able to obtain the documents free of
charge at the website maintained by the SEC at www.sec.gov. In addition, you may
obtain documents filed with the SEC by Stone free of charge by requesting them
in writing from Stone Energy Corporation, 625 East Kaliste Saloom Road,
Lafayette, Louisiana 70508, Attention: Corporate Secretary, or by telephone at
(337) 237-0410. You may obtain documents filed with the SEC by Basin free of
charge by requesting them in writing from Basin Exploration, Inc., 1670
Broadway, Suite 2800, Denver, Colorado, 80202, or by telephone, (303) 685-8000.
Stone and Basin, and their respective directors and executive officers, may
be deemed to be participants in the solicitation of proxies from the
stockholders of Stone and Basin in connection with the merger. Information about
the directors and executive officers of Stone and their ownership of Stone stock
is set forth in the proxy statement for Stone's 2000 Annual Meeting of
stockholders. Information about the directors and executive officers of Basin
and their ownership of Basin stock is set forth in the proxy statement for
Basin's 2000 Annual Meeting of stockholders. Investors may obtain additional
information regarding the interests of such participants by reading the proxy
statement/prospectus when it becomes available.
Investors should read the proxy statement/prospectus carefully when it becomes
available before making any voting or investment decisions.
