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Filed by Stone Energy Corporation and Basin
Exploration, Inc. 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 TRANSCRIPT OF A FINANCIAL ANALYST TELECONFERNECE CALL HELD
ON OCTOBER 30, 2000.
ANALYST TELECONFERENCE SCRIPT
October 30, 2000
PETE CANTY
Thank you operator. Good morning ladies and gentlemen. I am Pete Canty,
president and chief operating officer of Stone Energy Corporation. Thank you for
joining us this morning to hear the details regarding the combination of Stone
Energy and Basin Exploration.
With me this morning are Michael Smith, chief executive officer of Basin
Exploration, and Jim Prince, vice president and chief financial officer of Stone
Energy.
Before we begin, I want to remind you that this conference call may contain
statements that may be considered forward looking. Our forward looking statement
is at the bottom of today's press release and will be updated from time to time
in our SEC filings.
As we announced earlier today, the boards of directors of Stone Energy and Basin
Exploration have approved a definitive merger agreement under which Stone will
acquire all of the stock of Basin in a tax-free, stock-for-stock transaction.
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The combination is expected to be accounted for as a pooling of interests. It is
anticipated to be immediately accretive on a per share basis to cash flow,
earnings, and reserves. We anticipate the transaction to be completed early in
2001. The total equity value of the transaction is approximately $410 million.
Jim Prince will go into additional details of the terms of the transaction later
in the call.
Since going public in 1993, Stone has achieved a parallel compounded growth rate
for reserves and stockholder appreciation of some 26%. We believe this
transaction is consistent with Stone's focused growth philosophy and our belief
in our ability to increase value from quality properties.
As most of you know, Stone is an independent oil and gas company engaged in the
acquisition, exploitation and operation of oil and gas properties located in the
Gulf Coast Basin. Through our combination with Basin, we have increased our
strength, scope and critical mass to become what I believe to be the premier
Gulf of Mexico-focused E&P company.
Basin compliments Stone's balanced reserves and significant, defined upside
drilling potential. We are anticipating a 54% increase in proved reserves, a 50%
increase in daily production,and a 50% increase in drilling prospect inventory.
In addition, we will add almost 200,000 acres to our prospective undeveloped
lease block portfolio, where our combined technical group can apply their proven
abilities of finding oil and gas.
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During due diligence, I personally participated in the prospect evaluation
process and was delighted with the working rapport and enthusiasm between our
geoscientists.
We also plan to implement a hedging program to lock in high commodity prices on
a portion of our combined production. Together with Basin's long life Rocky
Mountain property base, this will yield a significant increase in our combined
company's predictable, discretionary cash flow.
Together, we will have one of the lowest debt-to-capitalization ratios in our
industry, giving us the financial leverage to seize future development and
acquisition opportunities.
We expect to realize a number of additional important benefits from this
transaction. Joining together will expand Stone's existing high-impact prospect
portfolio with a number of geologically opportunistic, multiple-well targets
which are uniformly distributed across the Gulf of Mexico. This is an area where
both of our organizations have achieved historically high rates of return.
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We have also significantly enhanced our potential for reserve growth by adding
22 producing properties and 47 unexplored primary term lease blocks in the Gulf
of Mexico. Additionally, this transaction will enable us to leverage our
existing technical and operational expertise over a larger property base while
we utilize Basin's 3-D seismic database across the Gulf of Mexico.
I'd like to conclude my remarks by saying again what a compelling opportunity
this transaction represents for both of our organizations.
By bringing together Stone's focus on detailed field analysis and exploration of
mature fields with Basin's new lease prospect generation expertise, we will
create a powerful company with complementary technical skills and a common
appreciation for low-cost operations.
This integration of core talents will enable us to significantly enhance the
value of our combined current and prospective asset base, making us, I believe,
the leading player among independent Gulf of Mexico-focused E&P companies.
I'd now like to turn the call over to Michael Smith, chief executive officer of
Basin, who will serve on the board of the combined company.
Michael . . .
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MICHAEL SMITH
Thank you Pete. This is a very exciting day for Basin Exploration, and I'm
delighted to be here with you today to discuss the transaction.
As Pete said, our combination represents a compelling opportunity for our
stockholders and our employees alike. Stone is the right fit for us in every
way, from the location and the scope of their exploration projects, to their
long-term strategic objectives, and a corporate culture with values that we
share.
Our combined drilling programs include several important projects that are
currently underway. By drawing on Stone's operational expertise and our enhanced
reserve and production base, we will be better able to commercialize these
discoveries and enhance our growth potential.
The depth of skill sets created by this combination will enable us to seize
exciting high-growth opportunities that neither of us could have pursued on a
stand-alone basis. We look forward to working together with Pete and his team to
transform our combined company into a formidable presence in the Gulf of Mexico.
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With that, I'd like to turn the call over to Jim Prince, Stone Energy's vice
president and chief financial officer, who will discuss the financial highlights
of this deal.
JIM PRINCE
Thanks Michael.
I'll now summarize the major terms of the transaction and discuss how these will
produce value for our stockholders.
Under the agreement, Basin stockholders will receive 0.3974 shares of Stone
common stock for each Basin share. Based upon Stone's closing price of $54.16 on
Friday, October 27, 2000, which represents $21.52 for each Basin share, this is
a premium of 10%. The total equity value of the transaction is approximately
$410 million.
In addition, Stone will assume approximately $48 million of Basin debt. Stone's
stockholders will own approximately 71% of the combined company and Basin's
stockholders will own approximately 29%. The combination is expected to be
accounted for as a pooling of interests and is anticipated to be immediately
accretive on a per share basis to cash flow, earnings, and reserves.
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The combined company will have a total market capitalization of approximately
$1.5 billion ($1.4 billion in equity; $100 million in net debt) and a 23% pro
forma total debt-to-book capitalization.
With regard to proved reserves: The combined company had pro forma reserves of
596.9 Bcfe as of December 31, 1999. The pro forma reserves were comprised of
approximately 65% gas and 35% oil and were divided between the Gulf Coast Basin
and the Rocky Mountains, 87% and 13%, respectively.
With respect to production: On a pro forma basis, the combined company produced
91 Bcfe for the fiscal year ended December 31, 1999 and an estimated 73 Bcfe for
the nine months ended September 30, 2000. Based on the 1999 year-end pro forma
proved reserves and production, the combined company had a reserve life of
approximately 6.6 years, consistent with the high proportion of shorter-life
Gulf Coast basin reserves. In 2000, we expect that the combined company will
produce approximately 101 Bcfe, or an 11% increase over pro forma production in
1999. We expect to grow pro forma combined production by over 15% in 2001.
Both companies currently have projects underway in a number of high potential
areas in the Gulf of Mexico. We look to the future with over 179 identified
prospects on the combined company's leasehold, or a 47% increase in prospect
inventory.
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These prospects are located on 43 producing properties and 52 unexplored primary
term lease blocks. As we begin to drill these prospects, the combined company
will have cash flow beyond what is necessary for our projected 2001 budget.
With regard to development: We recently announced an important discovery at
Eugene Island Block 243 on the Narwhal Prospect, which is expected to be brought
on full production in May 2001. In addition, we announced the development of
discoveries at Weeks Island, West Cameron Block 176 and East Cameron Block 64,
which are expected to begin production before year-end, and a discovery at
Vermilion Block 267, where we are drilling the first of a multi-well exploratory
drilling program. Basin has logged pay in new wells at West Delta Block 58,
South Marsh Island Block 235, South Timbalier Block 107 and Vermilion Block 329,
all of which we expect to be producing by the first quarter of 2001.
Let me address pro forma cash flow. The combined company generated $153 million
of discretionary cash flow for the fiscal year ended December 31, 1999 and an
estimated $204 million for the nine months ended September 30, 2000. We estimate
that if the companies were combined for the year 2000, total discretionary cash
flow would be projected to be in excess of $300 million (approximately $11.50
per pro forma share outstanding).
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We will implement a hedging program to lock in the cash flow value associated
with approximately 25%-30% of the combined production from total proved reserves
over the next two years. In 2001, based on the current outlook for commodity
prices and the security provided by these hedges, the combined company is
projected to generate a growth rate in discretionary cash flow in excess of 20%.
The transaction is conditioned, among other things, upon the approval of the
stockholders of both companies and customary regulatory approvals. We think this
can be closed early in 2001.
I'm very excited about the opportunities that this exciting combination creates,
and look forward to sharing more details soon. I'll now turn the call back over
to Pete.
PETE CANTY
Thanks Jim. I hope the information we've provided you today drives home the
strength of this combination, which I believe puts Stone among the strongest of
the P&E players in the Gulf of Mexico. This is truly a winning combination.
Ladies and gentlemen, that concludes our formal remarks. We will now be happy to
answer your questions. Operator . . .
Questions & Answers
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Mark Fischer with Bank of America Securities
Q. Good morning. The transaction looks quite straightforward. I was
wondering if you could give us a few more details on the hedging in
terms of costless collars, puts, prices, costs and what the thought
processes behind that piece of the transaction?
A. (Prince) Mark, we've taken a real close look at this. We've got new
accounting rules that become effective January 1 and it looks like
the least offensive of the rules as they apply to the contract is
actually a put and what we plan to do is to buy a put and put it in
place and use that to hedge about two years production.
Q. Do you know what prices you will be using for the put and more
or less what the range of cost of the put will be?
A. Our initial economics were run on a $3.50 per MCF and $25.00 a
barrel and apparently we're estimating that the put will be
somewhere between $20 and $25 million dollars.
Mark: Got it, thanks a lot, Jim.
Ken Beer with Johnson Rice
Q. Good morning guys - a couple of questions. 1) Pete or Michael,
on the assets up in the Rocky Mountains--you made quick comment on
them but I'd like to get some additional thoughts there. Obviously,
Stone and Basin, most of the focus is in the Gulf of Mexico what's
the thought with the Rocky Mountain aspect.
A. Good morning, Ken. First of all, let me say that our focus
remains in the Gulf of Mexico. The total reserves associated with
the Rocky Mountains represent about 13% of the combined companies
and about 3% of the production. So it's really diminimous to the
whole element, but I want to tell you that I have seen several
exciting exploration plays up there that I think could be
meaningful and impactful and we plan on the cash flow from that
division generating the ongoing operations in terms of the
exploration plays but our focus is going to stay in the Gulf of
Mexico. I do, however, want to say that we have been very impressed
with the people that we have seen that Basin has working the Rocky
Mountain efforts.
Q. Pete, let me shift gears--I've pushed on this before, but pro
forma, if you look at your CAPEX for 2001 could we get a sense as
to what that number might be and then maybe try to explore a little
further as to what you might do with the excess cash flow that Jim
alluded to that one where you are still looking to make
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additional property acquisitions there's not much -- you really
can't pay down debt, so what's the thoughts there? It 's a nice
problem to have.
A. Let me try to answer that. First of all, you can imagine that we
are in the process of confecting a budget for next year. There are
a lot of meaningful projects that are ongoing now for both
companies. We've targeted something in the range of $240,000,000.00
for CAPEX and we'll be finessing that over the next couple of
months as the process goes on. In terms of what are we going to do
with the excess, I'd like to address one excess that I never had
before and that's a very large prospect inventory of primary term
lease blocks. We thinks this gives us a currency that we haven't
had before to exchange for interests to farm out so that other
people can generate oil and gas reserves for us and also to focus
on a very high quality level inventory of prospects on the Basin
side that compliments what all of you who know Stone know that I
believe is a high quality prospect inventory on our side. So we are
going to monitor what prices are doing, but certainly we have a
super selection of opportunities to choose from for the foreseeable
future.
Q. Fair enough, although again, if you've got kind of let's call it
a $100,000,000.00 of excess cash can you put that to work - you
said that $240 was a finesse number, how much higher on the $240
can you go without really straining the combined companies?
A. Well, as I said we're working on that project and you know that
I tend to be on the conservative side of what I tell you guys and I
have given you that number now which I think is a pretty firm
number in terms of ideas that we have identified but there are a
number of acquisition opportunities that will continue to be out
there but first things first, we're going to get this deal closed,
integrate the people in and then we'll have a good bit of time and
next year to look at other opportunities that might be out there
for us. Certainly with our financial balance sheet, our balance
sheet rather, in the shape that it's in we have more financial
flexibility than we've ever had and that's one of the main reasons
that Michael and I confected this deal is to give the ongoing
company huge financial flexibility.
Response:. That's great. Thanks, I know you're excited about it, it looks
great, it looks very creative.
Thank you, Ken.
Ellen Hannen with Bear Stearns please go ahead with your questions.
Q. Thank you. Just a couple of questions that haven't been touched
on yet. Pete are you inheriting any hedges from Basin that we
should be aware of, (1) and (2) do you have an idea (kind of off
the top of your head) what your estimated merger related one time
expenses might be past the closing of the deal?
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A. In terms of the hedges, Ellen, we are looking at about 10% of
the total production stream combined currently in place and, I'm
sorry, could you come back with the second half of that question.
Q. Before I do, does that include your forward sales or no? That's
just straight hedging?
A. No, that's straight hedges that are in place and as you know
Stone has no hedges currently in place beyond the end of this year.
Q. The second question was do you have an idea of what your
estimated merger related expenses kind of a one time charge might
be once you close the deal?
A. (Prince) Yes, Ellen, the merger expenses before the hedges will be
about $25,000,000.00.
A. (Canty) Let me correct a number I gave you--the percentage is
actually 7%, not 10.
Q. Ok. And are there any kind of drop-dead provisions between the
two companies or is there a fixed ratio or anything else we should
be aware of?
A. We believe we're going to confect this deal and get it done.
Response: Thank you, good deal.
John Myers from Dain Rauscher please go ahead with your questions.
Q. Yeah, congratulations on both you guy's parts. Is there any break
up fees and these types of things out there, Pete?
A. This is Michael. There is a $15,000,000 break up fee for both
companies.
Q. Just a couple other issues - Pete, do you see any problem in
retaining Michael's staff out there because they have been
compensated in kind of a different type of basis than your staff
has been traditionally compensated on.
A. Well, first of all let me say that I like all of the people that
I've met at Basin. You know our team members are our most important
asset and I'm pretty enthusiastic when it comes to dealing one on
one with employees. I've already had some great meetings with Basin
employees on a hands on workstation related evaluation of their
prospects and I'm confident that they are going to be enthused
about participating with the Stone family on an ongoing basis.
Q. Final question, too, and just one thing that you guys have
always been short on is 3D seismic obviously Basin brings quite a
bit of that and will you continue to have their guys looking at
that or will your guys get in there and start looking at some of
that seismic data base and does this bring any change in strategy
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to the company -are you big enough now that you want to look at
different areas or geographic regions that you may have not
previously?
A. Well, let me say first, that all the guys are our guys as far as
I am concerned and when you see the prospects and how they lay out
on top of each other and the properties that we have--we're going
from 21 Stone properties to a combined 43 properties in the
combined company. I think that the database fits very nicely over
extensions that Stone has been looking at. Our properties are very
close together and we have many similar ideas that we will pursue
aggressively and I'll continue to say what I've said before, while
I like the opportunities that I've seen in the Rocky Mountains that
the Basin guys have, our primary focus will stay in the Gulf of
Mexico and we believe that there are tremendous additional
acquisition opportunities in the Gulf and that will be what we look
at for the majority of our capital and acquisitions in the future.
Response: Thanks guys
John Herlin from Merrill Lynch please go to your questions.
Q. Yeah, hi Pete, you've already talked about the fact that you get
more trading currency here. Ideally, you're talking now about this
being more or less a stepping stone type situation where you want
to get bigger. How big do you want Stone to be?
A. Well, my primary focus is on doing things well and there has
never been a focus of how big I was at any point in time. This
gives us the capacity to do things better than we would have been
able to do it previously in that we have a stronger financial
position than we previously had; we have more reserves; we have
more daily production by 50%; 50% increase in prospect inventory
that will grow our reserves; but as you allude to when we look at
who we now compare with, the folks that we want to compete head to
head with in the future for Gulf of Mexico shelf properties we are
now positioned to compete I think with anybody that's out there who
has a primary focus in our area. So how big we become depends upon
the quality of the opportunity that we have to acquire.
Q. And then on follow up, in terms of the due diligence, you said
that you spent a lot of time looking at these prospects. Do you
have any idea in terms of man hours what you did?
A. We were in there with a full group for a couple of weeks. And
when I say we were in there I mean we were on the workstation; we
were remapping, correlating logs, looking at the client curves of
every well that Basin operates and sharing that information with
them so that we know a lot about the combined companies and I think
that's one of the unusual aspects of the deal is that they have had
some thoughts about our properties as well as we about theirs. So I
think that there is going to be some real synergies that come out
of the combination of the technical
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teams because of the fact that we tend to do detailed field studies
that look for finding reserves around and beneath big mature fields
and they tend to be exploration oriented on new leases and
extensions and they are not competitive, but rather complimentary
skill sets.
Response: Thank you.
Mark Meyer from Simmons & Company please go to your questions.
Q. Good morning gentlemen, a couple of resource related
questions--first, Pete, I know you've got a couple of your core
jack ups locked up for long-term contracts. Can you talk a little
bit more about looking forward into 2001, does the program
accelerate and do you need to pick up some incremental rigs? 2),
perhaps you could comment a little bit about how you feel from a
staffing standpoint particularly related to operating folks and
geo-technical folks in the Gulf of Mexico?
A. Those are really good questions. Let me say that we are going to
go out of the year with eight rigs working for us. That's the
highest level that we've ever experienced. We still made
commitments to two more rigs last week. We think that that's a
critical element of our planning. You can't drill wells if you
don't have the iron to get it done with and we've worked in that
regard. Phil has already increased his operational staff and it's
no secret that Stone is out looking right now for increased
operational personnel to compliment the people that will come from
Basin. We believe and we've been telling people for the last year
that we have a management group in place to run a company twice the
size of what we have and there was a reason for that pre-planning
on our part. We think we are in place to do what we said we can do.
Q. Just one follow up. In terms of how we look at the earnings
accretion? can you talk a little bit where you are anticipating some
cost savings to come from?
A. Well, first of all I didn't model any cost savings immediately.
I mean I think obviously there will be some. But the fact of the
matter is that we're going to use our personnel to attack the
existing production a little bit more aggressively than it may have
been attacked in terms of daily visits to the well. We'll probably
upgrade some facilities a little bit since there is a consistency
across all the Stone operated properties and there may be a little
initial investment in this which I think ultimately will realize
some savings.
Response: Great, thanks Pete.
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Phil Pace with CS First Boston please go ahead with your questions.
Q. Thanks, congratulations Michael for picking the right partner to
combine with I think and congratulations, Pete, for doing an
accretive deal. I'm curious to know - I do think the key issue here
is cultural. I guess this means, Pete, you're going to be
participating in lease sales on a consistent basis going forward.
Also curious to know does it change your view on the deep water,
shift your strategy at all and have you already calculated if you
change the compensation structure for people back to more of a stock
and options, has that number been calculated in terms of converting
overrides into that, is that an obstacle in your mind or should that
be a pretty easy process?
A. Well, let me stay simplistic on this by saying that I welcome
the technical people at Basin I've met and those are the folks that
you are asking the questions about--people have existing
assignments on properties so I don't think that that's a conflict.
I've made commitment to Michael and to his technical group for them
to proceed with the March lease sale in the Gulf of Mexico. That
will be done as the two companies are combined. I was trying to
send a strong signal and I think it was received as I said it. Now
we're going to continue to look at opportunities that are out there
and certainly lease sale opportunities that will compete with other
things that we have to do. So I would really like to say that we're
going to look at all competing opportunities and if that means that
we would participate in lease sales then that's what we'll do but
if there are other things that are more economically compelling
that's the way we'd go. But, it's nice to have the ability to go in
both directions.
Q. Yeah, sure it is, and the deep water?
A. I think Michael made a very shrewd entry into the deep water by
acquiring an interest, albeit a 6.34% net revenue interest, in a
deep water project that already had the production infrastructure
in place. He bought a number of slots. It's been very successful in
terms of the results and it will give us a chance to learn through
watching how that's done what the true costs are and it's one of
the few opportunities that I've seen where you are able to qualify
what the on production costs would be by utilizing an in-place
structure. Whether we would do more of that at that scale I would
tend to think it would be more at that scale for a while and this
hasn't changed my thinking Phil at all about how big our pants have
to be to get into the deep water and I'd let Michael jump in and
amplify my remarks there.
A. (Michael) Pete was referring to Mississippi Canyon 110 where we have
non-operator interest and that has worked out very very well for us
and also in the Main Pass area we've been active. But most of what
we also do is in the shallow miocene trend so we've stayed between
50 feet of water and 150 feet of water on approximately 75% of what
we do is an area that our geoscientists feel that they know the
best and we believe in sticking to our knitting so be focused just
like
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Pete's organization and Pete was right before. The overlap is when
you look at the maps it's pretty stunning how well these two fit
together.
Response: That's great! Congratulations guys.
Bruce Wilcox from Cumberland Associates please go to your questions.
Q. Good morning. I'm curious in the $11.50 cash flow proforma
indicated figure, what was the actual realized price for the two
companies on both commodities that this sort of baked into this
number?
A. (Prince) Basically, Bruce, we have on the Gulf of Mexico about a
$0.10 MCF difference on posted prices and on oil it's less than a
dollar. Our models were all run on $3.50 MCF gas and $25.00 a barrel
oil.
Q. But does that pertain also to the $11.50 number. I mean you had
actual realized prices that incorporated you know whatever hedges
and other--you know, I'm just, I want to get underneath the
assumptions on the $11.50.
A. On the $11.50 basically we were coming down with the realized
prices in the 2000 model, of course was based upon actual for 9
months.
Q. Right, and that's what I'm wondering--I mean I'm familiar with
your guys with the Stone numbers but I'm not, but I mean were the
Basin numbers pretty much at market or were there hedges on...
A. It was market, in fact their Gulf Coast stuff is just like ours.
And I can tell you before the 9 month period ended they were
realizing somewhere in a range of $3.78 on gas and $30.32 on oil.
Q. That's the number I was looking for and just , Jim, can you tell
me off the top of your head how those numbers compare to the Stone
actual?
A. The Stone actual are pretty much in line. I think maybe we were
a few pennies higher, but really very comparative.
Q. Ok. So the $3.50 in gas and $25.00 oil then is materially below
the year 2000 to date realized in the case of both companies?
A. Yes sir.
Q. Ok. Who are the Basin reserve engineers?
A. Ryder Scott.
Response: Ok. Great, thanks and congratulations to both of you.
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May Chilton from JP Morgan please go ahead with your questions.
Q. Good morning. Michael, this is probably a question more directed
for you but can you please give us a little bit of background in
terms of how the two companies got to talking to one another, how
long you've been in discussions and whether you were approached or
approached anyone else?
A. We approached Pete earlier this summer and it was a direct
negotiation between the two of us.
Q. Ok. And if I just run the numbers roughly it looks like you're
going to get, the Basin shareholders will get 29% of the merged
company but you're providing about 35% of reserves and 33% of
production. If you could talk about that a little bit and I was
also under the assumption that you're have a pretty good drilling
program this year as well.
A. Absolutely, we're very excited about what we've done this year
and we're excited about the production increases after a tough
first quarter that we've been able to achieve since then. But we
think that the ratios we're dealing with here is clearly a win-win
situation for us and what we're looking at is we now can spread the
production risk over a much, much larger base of proved producing
properties so we have significantly minimized the downside risk in
our production base but we have retained the upside through both
our exploration prospects and Pete's exploration prospects and case
in point is their Narwhal discovery they made just two weeks ago. As
Pete indicated they believe it's a significant prospect - David and
our geoscientists have been in there mapping it, confirming what he
believes in it and we think that it's just a tremendous amount of
upside in the deal so we think the exchange rates are quite
appropriate and will be a win-win for us.
(County) Operator, we have time for one more question at this point
Certainly, Stan Liebman from Petri, Parkman & Company please go ahead
with your question.
It's actually Paul Libeman with Petri Parkman.
Q. Michael, a couple of questions for you. Given your drilling
program year to date and given that the year is pretty much over,
do you have any sense of what you think your reserve replacement is
going to be this year or where approved reserves might be a year
end?
A. They made it real easy for us last Monday. I have asked Pete to
worry about it. I can't say anything about what our reserve
replacement will be.
Q I'll let you make a full disclosure
A. I "ll let you make a full disclosure even with 200 people on
this line I don't think they would say it's full disclosure Paul.
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Q. Do you have any target for reserve replacement in the year 2000?
A. We're very pleased with how the year has gone and we've had very
good drilling success and that's all I'm really at liberty to say.
Q. One other question, how many Basin stock options will be
accelerated as a result of this deal and what's the waited average
exercise price?
A. Unfortunately, Neil isn't here with me. I will guesstimate it's
about one million shares which are almost all of them are in our
fully diluted numbers so and the average price I could not tell
you, but I believe it's about somewhere between $12 and $14 per
share.
Response: Okay, thanks!
PRIVATE SECURITIES LITIGATION REFORM ACT SAFE HARBOR STATEMENT
Except for the historical and present factual information contained herein, the
matters set forth in this press release, 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.
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, many 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.
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