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
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Date of report (Date of earliest event reported): July 16, 1997
Burlington Resources Inc.
(Exact name of Registrant as specified in its charter)
Delaware 1-9971 91-1413284
(State or Other (Commission File (IRS Employer
Jurisdiction of No.) Identification No.)
Incorporation)
5051 Westheimer, Suite 1400, Houston, Texas 77056
(Address of principle executive offices) (Zip Code)
Registrant's telephone number, including area code: (713) 624-
9500
Item 5. OTHER EVENTS
On July 16, 1997, Burlington Resources Inc., a Delaware
corporation ("Parent"), BR Acquisition Corporation, a Maryland
corporation and a wholly owned subsidiary of Parent ("Sub"), and
The Louisiana Land and Exploration Company, a Maryland
corporation (the "Company"), entered into an Agreement and Plan
of Merger (the "Merger Agreement"), pursuant to which Sub will be
merged (the "Merger") with and into the Company, with the Company
surviving the Merger. At the effective time of the Merger, each
issued and outstanding share of capital stock of the Company, par
value $.15 per share, other than shares held in the Company's
treasury and shares held by Parent, Sub or any subsidiary of
Parent or the Company, will be converted into 1.525 shares of
Parent common stock, together with the associated preferred stock
purchase rights under the Rights Agreement dated as of December
16, 1988, as amended, between Parent and The First National Bank
of Boston, as rights agent. As a result of the Merger, the
Company will become a wholly owned subsidiary of Parent. The
Merger is subject to the expiration or termination of the
applicable waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, approval by the stockholders of each of
Parent and the Company, and certain other conditions.
Concurrently with the execution and delivery of the Merger
Agreement, Parent entered into a Stock Option Agreement with the
Company pursuant to which the Company has granted to Parent an
option to purchase 5,145,000 shares (subject to adjustment) of
the Company's capital stock, at a purchase price of $70.34 per
share under certain circumstances if the Merger Agreement is
terminated. A copy of the joint press release, dated July 17,
1997, issued by Parent and the Company is attached hereto and is
incorporated by reference.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
Exhibit 99.1 - Press Release of Burlington
Resources Inc. and The Louisiana Land and
Exploration Company issued July 17, 1997
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, hereunto duly
authorized.
BURLINGTON RESOURCES INC.
By: /s/ Gerald J. Schissler
-----------------------------
Name: Gerald J. Schissler
Title: Executive Vice President,
Law & Administration
Date: July 18, 1997
EXHIBIT INDEX
Exhibit No. Description
99.1 Press Release of Burlington Resources Inc. and The
Louisiana Land and Exploration Company issued July 17,
1997
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.
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.
"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.
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
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.
# # #
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
