<PAGE> 1
EXHIBIT 99.1
FOR MORE INFORMATION CONTACT:
----------------------------
Joseph A. Reeves, Jr., Michael J. Mayell,
P. Richard "Dick" Gessinger at Meridian at (281) 597-7000
or Kitty Borah/Stacy Hutchinson at Shell Media Relations: (713) 241-4544
-FOR IMMEDIATE RELEASE-
THE MERIDIAN RESOURCE CORPORATION ACQUIRES AN OPTION TO REPURCHASE
PREFERRED AND COMMON STOCK FROM SHELL FOR $114 MILLION
Houston, Texas - July 18, 2000 - The Meridian Resource Corporation ("Meridian")
(NYSE: TMR) and Shell Louisiana Onshore Properties, Inc., an affiliate of Shell
Exploration & Production Company, today announced that they have signed a
definitive agreement granting Meridian an option to repurchase all of the
outstanding shares of Meridian preferred stock (convertible into 12.8 million
shares of common stock), plus six million shares of Meridian common stock, for
an aggregate cash price of $114 million.
The "Option and Standstill Agreement" is exercisable in a single transaction
through January 31, 2001. As consideration for the option, Meridian will pay
one million shares of Meridian common stock. If Meridian exercises the option,
Shell will still be Meridian's largest shareholder, with approximately 7.1
million shares of common stock.
TRANSACTION WILL BENEFIT BOTH COMPANIES.
We believe that this agreement is in the best interest of both Shell and
Meridian," commented Mr. Walter van de Vijver, President and CEO of Shell
Exploration & Production Company.
Meridian's Chairman and CEO, Joseph A. Reeves, Jr. agreed, noting, "We are
extremely pleased to have reached agreement with Shell on this issue. We have
had excellent results in exploiting Shell's former south Louisiana properties
over the past two years. The favorable terms and purchase price will benefit
all shareholders, both by potentially reducing the number of outstanding shares
and by eliminating the uncertainty resulting from the unknown amount of
dilution related to the "make whole" provision of the preferred stock. This
agreement should unlock the value of the common stock by vastly simplifying our
capital structure, which will allow Shell and all common shareholders to
realize the greatest return on their investment in Meridian."
TRANSACTION WILL BE FINANCED USING VARIOUS SOURCES OF FUNDS.
If the option is exercised, the Company would expect to finance the transaction
using cash on hand, internal cash flow, proceeds from previously announced
property sales, and, if necessary, borrowings under the Company's bank facility
or other capital market transactions, including the sale of common stock. With
no Meridian hedging contracts in place, the strength in oil and gas prices has
resulted in record levels of free cash flow. The Company does not expect that
exercising this option will impact the 2000 capital spending budget of $85
million, which was established at the beginning of this year, nor the Company's
capital spending plans for 2001.
<PAGE> 2
THE 1998 SHELL PROPERTY ACQUISITION ESTABLISHED THE PREFERRED STOCK POSITION.
In June of 1998, The Meridian Resource Corporation acquired substantially all
of Shell Oil Company's onshore south Louisiana oil and gas properties. In
consideration of the purchase, Meridian issued to Shell Louisiana Onshore
Properties, Inc., 12.1 million shares of common stock plus preferred stock with
a stated value of $135 million. The terms of the original "Stock Rights and
Restrictions Agreement" allowed for the conversion of the preferred stock into
common stock beginning July 1, 2000, with the potential for 25% to be converted
and sold each subsequent year. To date, the properties purchased from Shell
have been a source of valuable exploration and development projects defined by
Meridian's technical team. Combined with Meridian's assets, these properties
represent a significant project inventory for years to come.
MERIDIAN TO HOST CONFERENCE CALL.
Meridian's officers will host a conference call for interested analysts and
shareholders at 3:00 p.m. CDT on Tuesday, July 18. The telephone number to dial
for the Meridian Conference Call is 1-800-263-9150.
Certain of the foregoing statements may be deemed "forward-looking statements"
within the meaning of the Securities Exchange Act of 1934. Although Meridian
believes that the expectations reflected in such forward-looking statements are
reasonable, these statements involve risks and uncertainties that may cause
actual future activities and results to be materially different from those
suggested or described in this press release. These include risks related to
raising sufficient public and/or private capital and the terms thereof, as well
as risks inherent in the drilling of oil and natural gas wells, including risks
of fire, explosion, blowout, pipe failure, casing collapse, unusual or
unexpected formation pressures, environmental hazards, and other operating and
production risks inherent in oil and natural gas drilling and production
activities, which may temporarily or permanently reduce production or cause
initial production or test results to not be indicative of future well
performance or delay the timing of sales or completion of drilling operations;
risks with respect to oil and natural gas prices, a material decline in which
could cause the Company to delay or suspend planned drilling operations or
reduce production levels; and risks relating to the availability of capital to
fund drilling operations that can be adversely affected by adverse drilling
results, production declines and declines in oil and gas prices.
The Meridian Resource Corporation is an independent oil and natural gas company
engaged in the exploration for and development of oil and natural gas
properties utilizing 3-D seismic technology, primarily in south Louisiana,
southeast Texas and offshore Gulf of Mexico. Meridian's office is located in
Houston, Texas and the stock is traded on the New York Stock Exchange under the
symbol "TMR."
- # # # -
