NGAS Resources, Inc. announced that the company will be acquired by Magnum Hunter Resources Corporation, an exploration and production company with extensive experience in oil and gas development in the onshore area of the United States.
Magnum Hunter Resources Corporation will issue 0.0846 shares of its common stock in exchange for each share of NGAS Resources, Inc. that is outstanding. This exchange ratio values NGAS Resources, Inc. at $0.55 per share, a 41% premium to the closing price of the company prior to the deal.
The value of the deal is $98 million on an enterprise value basis, which includes both the value of the stock issued and the debt assumed by Magnum Hunter Resources Corporation. NGAS Resources, Inc. has 78.4 million shares outstanding.
NGAS Resources, Inc. has oil and gas assets located in the Appalachian Basin in the United States. The company has approximately 345,000 acres under lease, 1,400 producing wells and reported proved reserves of 78.4 billion cubic feet of natural gas equivalents as of 12/31/2009.
NGAS Resources, Inc. is a Canadian corporation that is domiciled in British Columbia, and the deal will be consummated under provincial law in that province. The deal is expected to close after March 2011.
For more information on the company, go to www.ngas.com