PETROHAWK ENERGY CORP

PETROHAWK ENERGY CORP terminated the registration of a class of securities, ending its reporting obligation for them.

listing compliance notice

On November 8, 2011 the board concluded that the 2010 annual financial statements and several interim statements (June and September 2010, March and June 2011) should no longer be relied upon, because the May 2010 transfer of the Haynesville gathering system to the KinderHawk joint venture (about $917 million for a 50% stake) was wrongly booked as a sale. About $155 million of the $719.4 million deferred gain was recognized in 2010 and $95 million in the first half of 2011. Petrohawk plans to restate, and will miss the November 9 deadline for its third-quarter report. The filing says there is no evidence of fraud, the change does not affect the joint venture's commercial arrangements or net cash flows, and the errors were found during transition after the BHP acquisition. The former auditor Deloitte also said its 2010 audit report should not be relied upon. This reopens the KinderHawk accounting from the earlier sales.

financial restatement

PETROHAWK ENERGY CORP deregistered its securities, ending its obligation to file reports with the SEC.

listing compliance notice

PETROHAWK ENERGY CORP's exchange filed to remove a class of its securities from listing.

listing compliance notice

The BHP takeover closed. The tender offer expired August 19, 2011 with about 293.9 million shares (about 97.4% of the total) tendered, and on August 25, 2011 the merger sub merged into Petrohawk, which is now a wholly owned BHP subsidiary. Each remaining share was converted into the right to receive $38.75 in cash, except shares held by BHP-side entities or by holders who properly demand appraisal. NYSE trading was suspended after August 25, 2011, and Petrohawk asked the NYSE to file the form to delist and deregister the shares. Three directors (Christmas, Irish, Merriman) resigned and the BHP-side directors took over, with Christmas and David Nelson then appointed by BHP's parent. KPMG replaced Deloitte as auditor, and the charter and bylaws were rewritten. This resolves the BHP offer thread.

business combination

BHP's buyer accepted the tendered shares on August 20, 2011, which gave BHP control of Petrohawk. BHP's designees (Yeager, Powell, Sahlberg, Smith) replaced six directors including CEO Floyd Wilson, and Deloitte was dismissed as auditor. The change of control also obliges Petrohawk to offer to buy back its 10.5% notes due 2014 ($600M) and 7.875% notes due 2015 ($800M) at 101% of principal within 30 days. Shares will leave the NYSE after the merger; funds came from BHP's cash, commercial paper and new $7.5 billion facilities.

business combination

BHP's side filed the final amendment reporting the same result: the offer expired August 19, 2011 with about 293.9 million shares (about 97.4%) tendered, all accepted for payment, with a short-form merger to follow at $38.75 cash per share, except for appraisal holders. It adds the August 21 press release as an exhibit and has no new terms.

business combination

The BHP offer expired at midnight on August 19, 2011 with about 293.9 million shares (about 97.4% of those outstanding) tendered, including about 36.0 million by guaranteed delivery. BHP's buyer accepted them for payment and plans a quick short-form merger in which remaining shares, except those of holders who properly demand appraisal, convert to $38.75 cash. This resolves the tender-offer thread; the merger itself was still to come.

business combination

BHP amended its tender offer filing to disclose that Petrohawk and its directors face purported class action lawsuits over the deal in Delaware Chancery Court and Harris County, Texas, with BHP entities also named in several. The suits allege the board failed to maximize value and agreed to overly restrictive deal protections, and seek to block the deal, or rescind it if completed, plus damages. BHP says the suits are without merit. It also made minor corrections to officer and ownership details. This is a new legal risk to the transaction.

business combination

Petrohawk's formal response to BHP's tender offer, as the board's recommendation filing: the offer is $38.75 cash per share and expires at midnight New York time on August 19, 2011, unless extended. Once a majority of shares are tendered and paid for, BHP can designate directors to the board (up to eight if it is at its maximum size of eleven), and untendered shares would be cancelled and converted into $38.75 in the merger. The text provided is truncated, so the board's reasoning and the Goldman Sachs opinion are not visible here. Shareholders' final treatment is still pending.

business combination

On July 25, 2011 BHP's subsidiary formally launched its $38.75-per-share cash tender offer for all Petrohawk shares, valued at about $12.16 billion on 303,892,075 shares outstanding plus 9,866,952 shares reserved for options and appreciation rights. The cover page does not state the expiration date, which Petrohawk's own filing sets at midnight August 19, 2011 unless extended. This is the step announced on July 15; shareholders' final treatment is still pending.

business combination

Petrohawk's formal report on the July 14, 2011 merger agreement with BHP Billiton: $38.75 cash per share via a tender offer, then a merger for any untendered shares at the same price (shareholders who properly demand appraisal are excluded). The offer needs a majority of shares tendered, U.S. antitrust and CFIUS clearance, and has no financing condition; Petrohawk owes BHP a $395 million fee if the agreement ends under specified circumstances. Seven executives (Wilson, Mize, Herod, Holcombe, Stoneburner, Helm, Elkouri) signed retention agreements effective only when BHP accepts shares; for example Wilson gets a $2,000,000 retention bonus at that point and a later $3,000,000 consulting fee. This confirms the terms of the July 15 announcement.

business combination

On July 14-15, 2011 Petrohawk agreed to be acquired by BHP Billiton for $38.75 per share in cash through a tender offer, valuing the equity at about $12.1 billion. The board unanimously recommends that shareholders accept. The tender offer is expected to start by July 25, 2011 and needs a majority of shares tendered plus U.S. antitrust and CFIUS clearance. Shares not tendered would be converted into the same $38.75 in the merger, and closing is expected in the third quarter of 2011. This is a proposed deal, not yet completed, so shareholders' treatment is not yet final.

business combination

On July 1, 2011 Petrohawk closed the sale of its remaining 50% of KinderHawk to Kinder Morgan and 25% of EagleHawk, for about $920 million ($836 million after closing adjustments). Petrohawk keeps control of EagleHawk and still consolidates it. A fourth credit amendment permits the transfers, keeps the oil and gas borrowing base at $1.8 billion and cuts the midstream part to zero. The pro forma statements show long-term debt falling by $364 million for the KinderHawk sale. This completes the deal announced May 4.

asset acquisition disposition

On May 4, 2011 Petrohawk agreed to sell its remaining 50% of the KinderHawk gathering joint venture to a Kinder Morgan affiliate, and 25% of a new Eagle Ford gathering company called EagleHawk to another Kinder Morgan affiliate, for about $920 million combined, subject to adjustments. EagleHawk will hold the gathering and treating assets for the Hawkville and Black Hawk fields, and Petrohawk's Eagle Ford production will be dedicated to it. Closing was expected around July 1, 2011, subject to third-party consents. This sells the KinderHawk stake first sold in half in May 2010.

material agreement

On December 22, 2010 Petrohawk sold its Fayetteville Shale gas properties (the position agreed in 2007) to an affiliate of XTO Energy for $575 million in cash before adjustments, effective October 1, 2010, and XTO agreed to buy the Fayetteville midstream assets for about $75 million, expected to close in the first quarter of 2011. A second credit amendment clarifies permitted asset sale provisions, and the oil and gas borrowing base is now about $1.55 billion (down from $1.75 billion) after the sale. This resolves the Fayetteville open thread; the pro forma shows about $129 million of debt paydown from the upstream proceeds.

asset acquisition disposition

Effective November 8, 2010 Petrohawk amended its August 2010 credit agreement, setting the borrowing base on its oil and gas properties at about $1.75 billion. The amendment let new lenders into the $2.0 billion facility and reallocated each lender's commitments.

material agreement

The $825 million 7 1/4% notes due 2018 closed on August 17, 2010, and about $689 million of the proceeds was used to buy back $652.7 million (about 84.9%) of the 9 1/8% notes due 2013 that holders tendered. Petrohawk will redeem the remaining $115,985,000 on September 20, 2010 at 104.563% of face, and expects about $84.5 million of charges in the third quarter of 2010. Remaining 2013 note holders also lose protective covenants through the amended indenture. It must also offer to exchange the new notes for registered ones (file within 90 days, effective within 270 days) or face extra interest.

debt financing

On August 3, 2010 Petrohawk agreed to sell $825 million of 7 1/4% Senior Notes due 2018 to initial purchasers led by Barclays Capital in a private placement, at 100% of face value, for net proceeds of about $809.3 million. The filing does not state the use of proceeds here (the next filing links it to buying back the 2013 notes).

material agreement

On August 2, 2010 Petrohawk replaced its October 2009 credit agreement with a Fifth Amended and Restated $2.0 billion revolver, with an initial available borrowing base of about $1.05 billion. Borrowing costs are slightly lower (LIBOR plus 2.00-3.00% versus 2.25-3.25%) and maturity extends from July 1, 2013 to July 1, 2014. It remains secured by first-priority liens on substantially all assets, with the same 2.5x interest coverage and 1.0x current ratio covenants.

debt financing

On May 21, 2010 Petrohawk closed the KinderHawk joint venture: it put its Haynesville Shale gathering and treating business into the new company, and Kinder Morgan's affiliate contributed $921 million in cash, which was paid out to Petrohawk (higher than the $875 million first announced). Each side owns 50%, Petrohawk must deliver at least 50% of projected production from covered wells for five years, and each side must fund up to $201.3 million of further capital contributions across 2010-2011, less amounts spent before closing. This resolves the pending joint venture thread; the pro forma balance sheet shows long-term debt falling by $579 million, which the filing's adjustment note ties to the proceeds.

asset acquisition disposition

On May 24, 2010 Petrohawk said its Kinder Morgan Haynesville midstream joint venture ($875 million) and the $320 million Terryville Field sale had closed, bringing 2010 asset sales to about $1.37 billion against a $1 billion target. It also lowered 2010 production guidance to 650-660 MMcfe/d from 670-680 and gave 2010-2012 capital spending guidance, with 2010 at $2,130 million.

drilling progress report

On May 17, 2010 Petrohawk amended its October 2009 credit agreement so the KinderHawk joint venture can close, expressly permitting the transfer of the Haynesville gathering business and required capital contributions. The filing says the borrowing base is about $1.3 billion after the sale of interests in the Terryville and WEHLU fields (a sale not described in earlier filings here), and will be $1.05 billion once the joint venture closes, as the midstream portion falls to about $50 million.

debt financing

On April 12, 2010 Petrohawk agreed to put its Haynesville Shale gathering and treating business in Northwest Louisiana into a new 50/50 joint venture, KinderHawk Field Services, with an affiliate of Kinder Morgan Energy Partners, which will contribute $875 million in cash, paid out to Petrohawk. Petrohawk must supply at least 50% of its projected Haynesville production for five years, pay a $0.34/Mcf gathering fee, and fund up to $201.3 million of capital contributions in 2010-2011. Closing is expected by the end of May 2010, subject to antitrust and other conditions.

material agreement

On October 30, 2009 Petrohawk closed the sale of its Permian Basin properties for $376 million in cash before closing adjustments, with $37.6 million already received as a deposit. The buyer is described only as a privately-owned company; the agreement named Merit Management Partners I, L.P. The borrowing base was cut by $200 million to $1.18 billion, and $36 million was drawn on the revolver. The pro forma balance sheet shows $338.4 million received by a qualified intermediary, linking to the earlier open thread on like-kind exchange funds.

asset acquisition disposition

On October 14, 2009 Petrohawk replaced its September 2008 credit agreement with a Fourth Amended and Restated $2.0 billion revolver, with an initial available borrowing base of $1.38 billion that falls to $1.18 billion when the Permian sale closes. Borrowing costs rise sharply: LIBOR plus 2.25-3.25%, versus 1.25-2.00% before. The facility still matures July 1, 2013 and is secured by first-priority liens on substantially all assets.

debt financing

On September 18, 2009 Petrohawk agreed to sell its Permian Basin properties to Merit Management Partners I, L.P. for $376 million in cash, subject to adjustments, with closing expected by October 30, 2009. The properties had 177 Bcfe of estimated proved reserves at December 31, 2008 and produce about 30 MMcfe/d. This is the Permian position earlier planned for an MLP that was delayed in January 2008; the filing does not say why it is being sold outright.

material agreement

On August 5, 2009 Petrohawk agreed to sell 25,000,000 new common shares to underwriters led by Barclays Capital and J.P. Morgan, with a 30-day option for 3,750,000 more. Net proceeds are estimated at about $549.1 million excluding the option, with closing expected around August 11, 2009. This is another dilutive share issue after the February 2009 offering; the filing does not state the use of proceeds.

material agreement

PETROHAWK ENERGY CORP's exchange filed to remove a class of its securities from listing.

listing compliance notice

On February 26, 2009 Petrohawk agreed to sell 22,000,000 new common shares, with a 30-day option for 3,300,000 more. Net proceeds are estimated at about $376.1 million excluding the option, with closing expected around March 4, 2009. This is another share issue that dilutes existing holders; the filing does not state the use of proceeds.

material agreement

On January 22, 2009 Petrohawk agreed to sell $600 million of 10 1/2% senior notes due 2014. The notes were priced at 91.279% of face to yield 12 3/4%, with net proceeds of about $535.4 million, and the indenture is dated January 27, 2009. They are unsecured and rank behind the secured revolver, and the company must file an exchange-offer registration by April 27, 2009. The coupon is notably higher than the 7 7/8% notes sold in 2008. The filing does not state the use of proceeds.

debt financing

the New York Stock Exchange certified PETROHAWK ENERGY CORP's securities for listing, clearing them to begin trading.

listing compliance notice

On September 10, 2008 Petrohawk replaced its $1 billion revolver with a Third Amended and Restated credit agreement: a $1.5 billion facility with a $1.1 billion borrowing base, redetermined semi-annually, and drawn amounts maturing July 1, 2013. Borrowings are secured by first-priority liens on substantially all company assets, including subsidiary equity, and the agreement has covenants on working capital, interest coverage, dividends and debt.

debt financing

On August 11, 2008 Petrohawk agreed to sell 25,000,000 new common shares, and the underwriters exercised in full their option for 3,750,000 more. Net proceeds are estimated at about $733 million, with closing expected around August 15, 2008. This is another large share issue that dilutes existing holders; the filing does not state the use of proceeds.

material agreement

On June 16, 2008 Petrohawk agreed to sell a further $300 million of 7 7/8% senior notes due 2015 to Merrill Lynch, treated as the same class as the $500 million issued May 13. Net proceeds of about $293.5 million are expected to fund the 2008 capital budget, acquisitions and working capital. After the May and June financings, pro forma total debt at March 31, 2008 would be about $1.83 billion, with about $800 million available under the revolver.

material agreement

Petrohawk agreed to sell 25,000,000 new common shares (net proceeds about $632.4 million, with a 3,750,000-share option for the underwriters) and, separately, $500 million of 7 7/8% senior notes due 2015 sold at 100% (net about $489.5 million), both expected to close around May 13, 2008. The notes carry registration rights. The filing does not state how the proceeds will be used. The share sale dilutes existing holders and the notes add debt.

material agreement

Effective February 5, 2008, a Fifth Amendment to the revolving credit agreement raised the borrowing base from $675 million to $1 billion, including a $100 million component that expires February 5, 2009. Borrowings above $900 million carry higher margins (2.00% LIBOR, 0.750% ABR), and a 2008 waiver lets the company hedge up to 70% of forecast production by swaps. This reverses the cut to $675 million made at the Gulf Coast sale closing.

material agreement

On January 29, 2008 Petrohawk agreed to sell 18,000,000 new common shares to underwriters. The underwriters have exercised in full their option for 2,700,000 more shares, and net proceeds are estimated at about $296.3 million, with closing expected February 1, 2008. This adds shares to the count, diluting existing holders; the filing does not state the use of proceeds.

material agreement

The Gulf Coast division sale to Milagro closed November 30, 2007 for $825 million ($700 million cash plus a $125 million 12% note). The properties produced about 100 Mmcfe/d and had 204 Bcfe of proved reserves at December 31, 2006. The revolver borrowing base fell from $900 million to $675 million, with $610 million drawn at November 30. Pro forma data show $650 million of the cash sitting with a qualified intermediary for possible like-kind exchanges. This resolves the October 15 sale agreement.

asset acquisition disposition

On November 26, 2007 Petrohawk agreed to buy about 24,000 net acres of Fayetteville Shale leases in Van Buren and Conway Counties, Arkansas, producing about 11 Mmcfe/d, for $343 million cash. The economic effective date is October 1, 2007, and closing is expected by December 31, 2007. This is a new area for the company and is separate from the Gulf Coast sale.

material agreement

On October 15, 2007 Petrohawk agreed to sell its entire Gulf Coast division to Milagro Development I, LP for $825 million ($700 million cash plus a $125 million 12% note), effective July 1, 2007, with closing expected in Q4 2007. A Fourth Amendment lifts the revolver borrowing base to $900 million until closing, then cuts it to $675 million. This follows earlier Gulf of Mexico sales and moves the company away from the Gulf Coast assets it gained in the Mission and KCS deals.

material agreement

PETROHAWK ENERGY CORP's securities were notified for removal from listing and registration on its exchange.

listing compliance notice

the New York Stock Exchange certified PETROHAWK ENERGY CORP's securities for listing, clearing them to begin trading.

listing compliance notice

Petrohawk reported 2006 results: record revenue of $201.9 million for Q4 and $587.8 million for the year, and 2006 net income of $116.6 million ($0.92 per diluted share). Proved reserves rose from 437 Bcfe to 1.076 Tcfe. The company credits the KCS merger and drilling in North Louisiana (Elm Grove, Terryville). It also applied to move its listing from NASDAQ (HAWK) to the NYSE under the symbol HK, with trading expected to start March 13, 2007.

listing compliance notice

Petrohawk reported that its Q4 2006 net production rate was 318 Mmcfe/d, up 175% from Q4 2005 net of divested properties that were producing about 30 Mmcfe/d. It cited divestments, voluntary price-related shut-ins in early October and completion delays as affecting the quarter, and said divestments brought in about $135 million. It set a 2007 capital budget of about $575 million, with about 65% of 2007 production hedged at average floors of $7.22/Mmbtu gas and $63.05/Bbl oil. The company's address is now 1000 Louisiana, Suite 5600.

drilling progress report

On July 27, 2006 Petrohawk sold an extra $125 million of its 9 1/8% senior notes due 2013 at 101.125% of face value, for gross proceeds of about $140.6 million, and used the net proceeds to repay its senior credit agreement debt. A July 24 amendment to the revolver allowed the issue. This raises the 2013 notes to $775 million in total and shifts some borrowing from the bank facility to fixed-rate notes.

debt financing

The KCS merger closed on July 12, 2006, with Petrohawk as the surviving company and successor to KCS's 7 1/8% notes due 2012. The same day, Petrohawk issued the 9 1/8% notes due 2013, signed a Second Amended and Restated Senior Revolving Credit Agreement, and accepted $124.236 million of the 9 7/8% 2011 notes (the Mission notes) in its tender offer, then stripped most protective covenants from the remaining notes. Shareholders approved the larger incentive plans (employee 7.05M shares, director 600,000), and Petrohawk signed two-year employment agreements with Wilson ($500,000 salary) and other executives, and a one-year agreement with William Hahne as COO. This resolves the KCS merger and the Mission notes repurchase thread; the cash and share terms were set earlier, and the visible text does not show the credit agreement's size.

asset acquisition disposition

On June 23, 2006 Petrohawk agreed to sell $650 million of 9 1/8% senior notes due 2013 to a group of banks led by Credit Suisse in a private placement, at 97.617% of face value. The notes are to be issued under an indenture dated July 12, 2006, with a promise to register them for resale. The filing does not state what the money is for (inference: the KCS merger cash and debt, which is not stated here). This adds significant new debt.

material agreement

Petrohawk filed the registration statement (Form S-4) for the KCS Energy merger, registering up to 88 million shares for KCS holders. Each KCS share converts into $9.00 cash plus 1.65 Petrohawk shares, about 83.7 million shares and $450 million in total. Completion needs both companies' shareholder votes plus approval to raise authorized shares; the Petrohawk annual meeting also proposes lifting authorized common from 125 million to 300 million, the employee plan from 4.25M to 7.05M shares and the director plan from 400,000 to 600,000. This continues the KCS merger thread; meeting dates are still blank in this version.

business combination

On April 20-21, 2006 Petrohawk agreed to acquire KCS Energy, Inc. for $9.00 cash plus 1.65 Petrohawk shares per KCS share, about 84 million Petrohawk shares and $450 million in total. Floyd Wilson stays Chairman, President and CEO, and the nine-person board would have five Petrohawk and four KCS nominees. The combined company would have about 1 Tcfe of proved reserves (about 68% developed, 82% gas). It needs approval from both companies' shareholders, regulatory approvals and an effective registration statement; KCS owes a $45 million termination fee in specified cases, and insiders holding about 4% of Petrohawk and 3% of KCS have signed voting agreements. This is a much larger deal than Mission and will heavily dilute existing shareholders.

material agreement

On February 3, 2006 Petrohawk and its subsidiary Petrohawk Properties, LP agreed to sell certain Gulf of Mexico federal-waters oil and gas interests to Northstar GOM, LLC for $52.5 million cash, effective January 1, 2006, with closing expected in March 2006. The filing does not identify which fields are sold, so it is unclear whether this includes the Breton Sound or West Broussard interests on the books.

material agreement

On January 27, 2006 Petrohawk closed the Winwell stock purchase ($208.0 million cash) and the asset purchase ($86.2 million cash), both announced in December (the Winwell price rose from $175M, per adjustments). The properties are in the Elm Grove and Caspiana fields in North Louisiana, with about 106 Bcfe of the company's internally estimated proved reserves and about 16 MMcfe per day of production. To support it, the revolver's borrowing base rose to $400 million (maximum $600 million) and the second-lien term loan commitment to $300 million, with an extra $75 million incremental commitment. The 13 million shares at $14.50 were sold on February 1, 2006 for about $180.8 million net of placement fees, with registration rights requiring a resale registration within 75 days. This completes the December acquisitions and the January share sale.

asset acquisition disposition

On January 25, 2006 Petrohawk agreed to privately sell 13,000,000 new shares at $14.50 each (about $188.5 million gross), with placement agents paid $0.5945 per share. It also agreed to buy back 3,322,441 shares from EnCap and affiliates at the net per-share proceeds of that offering. The filing does not state what the proceeds are for; the Winwell and asset purchases from December are an inference. Net, shares outstanding rise by about 9.7 million, and EnCap's stake is reduced.

material agreement

On December 14, 2005 Petrohawk agreed to buy all the shares of Winwell Resources, Inc. for $175 million cash, and separately to buy assets from Redley Company, Burris Run Company and Red Clay Minerals for $86.67 million cash, both subject to adjustments. Both are expected to close in January 2006. This is a new round of acquisitions after the Mission deal; the filing does not say how they will be funded.

material agreement

The Mission Resources merger closed effective July 28, 2005: Petrohawk issued about 19.565 million shares and paid about $137.7 million in cash to Mission's former holders (slightly more than the ~19.234M shares and ~$135.4M cash in the earlier terms). To go with it, the revolver was restated with a $280 million borrowing base (maturing July 28, 2009) and the second-lien term loan was raised from $50M to $75M, with an option for $75M more within 45 days. Petrohawk assumed Mission's 9 7/8% senior notes due 2011 and must offer to repurchase them at 101% because of the merger. Two Mission directors joined the board, making nine, and shareholders approved larger incentive plans (employee plan 2.75M to 4.25M shares; director plan 200,000 to 400,000). This resolves the Mission merger thread and adds debt and share dilution.

asset acquisition disposition

On June 30, 2005 Petrohawk and PHAWK, LLC (the EnCap-linked holder) agreed to convert PHAWK's $35 million 8% convertible note, originally dated May 25, 2004, into 8,750,000 common shares, about a year before the earliest conversion date of May 25, 2006. Petrohawk paid PHAWK a premium of $2,410,621.73 (the interest to May 25, 2006, discounted at 10%). The note was converted that day, so the debt is gone and shareholders are diluted by 8.75 million new shares. One disinterested director (Robert C. Stone Jr.) approved it because six of seven directors have interests in PHAWK.

material agreement termination

Petrohawk filed its registration statement (Form S-4) for the Mission Resources merger signed April 3, 2005. It covers up to 21,935,083 new Petrohawk shares and says Petrohawk will issue about 19.234 million shares and pay about $135.4 million cash, with possible upward adjustment of up to about 1.8 million shares and $12.7 million cash if more Mission shares are issued. Petrohawk shareholders will vote on the share issuance, raising authorized common stock from 75 million to 125 million shares, and raising the employee incentive plan from 2.75 million to 4.25 million shares and the director plan from 200,000 to 400,000 shares, plus electing two directors and ratifying Deloitte. Meeting dates are blank and the document is not yet effective, so this advances the open merger approval thread without completing it.

business combination

On April 3-4, 2005 Petrohawk agreed to acquire Mission Resources Corporation for about $135 million cash and about 19.2 million Petrohawk shares (roughly 60% stock, 40% cash), with the per-share price adjusting to Petrohawk's stock price. At the April 1 close of $11.53 this implied $8.60 or 0.7458 Petrohawk shares per Mission share. It needs approval by both companies' shareholders, regulatory approvals and an effective registration statement; Mission owes a $12.5 million termination fee in specified cases, and holders of about 32% of Mission have agreed to vote in favor. Petrohawk shareholders face further dilution from the new shares issued.

material agreement

On February 25, 2005 Petrohawk completed its roughly $53 million cash purchase of Proton Oil & Gas, funded from its existing credit facility, which added about 28 Bcfe of proved reserves. The same day it completed the roughly $80 million cash sale of Wynn-Crosby royalty properties to Brown Drake Royalties, covering about 26 Bcfe and about 5 MMcfe/day.

asset acquisition disposition

On February 4, 2005 Petrohawk agreed to buy all the stock of Proton Oil & Gas Corporation for $53 million cash, to be funded from its existing credit facility. Proton's subsidiary owns interests in South Texas and South Louisiana with about 28 Bcfe of estimated proved reserves; closing was expected by February 25, 2005.

material agreement

Petrohawk's Wynn-Crosby subsidiaries agreed on January 14, 2005 to sell royalty interest properties (about 1,500 wells, mostly in the Permian Basin) to Noble Royalties (Brown Drake Royalties) for $80 million cash, expected to close by February 15, 2005. This follows through on the post-closing royalty sale flagged in the October 2004 announcement of the Wynn-Crosby deal.

material agreement

On December 31, 2004 the Series B preferred issued for the Wynn-Crosby deal converted into 25,806,450 common shares, lifting common shares outstanding from about 13.98 million to about 39.79 million. Authorized common shares were raised from 50 million to 75 million, and the 2004 Employee Incentive Plan share limit rose from 750,000 to 2,750,000. PHAWK, LLC's stake fell from about 54% to about 19% of common stock (about 40% if its warrants and convertible note are exercised and converted), so existing holders were diluted as the earlier financing plan implied.

security holder rights change

Petrohawk completed the Wynn-Crosby acquisition (announced Oct 13) on November 23, 2004, paying about $422 million in cash after closing adjustments; this is slightly below the $425 million headline price. To fund it, it sold about $200 million (2,580,645 shares at $77.50, about $187.6 million net) of Series B 8% convertible preferred stock, and took on a new $400 million revolving credit facility (initial borrowing base $200 million) and a $50 million second-lien term loan. The filing gives pro forma reserves of about 233 Bcfe and about 57 MMcfe/day, and says the preferred converts into 25,806,645 common shares, so existing shareholders are diluted. This resolves the Wynn-Crosby closing and financing thread.

asset acquisition disposition

Petrohawk agreed to buy privately held Wynn-Crosby Energy and affiliated partnerships for $425 million in cash (subject to adjustments), with closing expected by November 30, 2004. The press release cites about 200 Bcfe of proved reserves and about 46 MMcfe/day of production, and says funding will be a mix of cash, bank debt and equity, so shareholders may face dilution (inference from the stated equity financing). Management called it a 'transforming event' and said some acquired royalty properties may be sold afterwards.

business combination