Hess Corp. said on Tuesday it will acquire American Oil & Gas Inc. in a stock deal worth about $445 million and boost its acreage in the North Dakota Bakken shale oil play.
Hess said it would issue 0.1373 shares of its common stock in exchange for each outstanding share of American Oil & Gas' common stock.
The deal would represent a 9.4 percent premium over American Oil & Gas shares closing price of $6.69 per share on Tuesday.
American Oil & Gas has a total market capitalization of about $409 million. Shares outstanding as of June 7 are 60.81 million, according to Thomson Reuters data.
According to its latest quarterly report, American Oil controls about 68,500 net acres through its Goliath Bakken and Three Forks focused project located in the Williston Basin, N.D.
American Oil has oil and gas properties worth about $64.1 million, and proven reserves of about 617,000 barrels of oil and 1.5 million of thousand cubic feet of natural gas (mcf) as of March 31.
Hess also said it would provide American Oil & Gas with a $30 million working capital credit facility to help the company finance exploration and production activities ahead of the completion of the deal.
The deal will boost Hess Corp.'s strategic acreage position in the Bakken oil play by about 85,000 net acres and allow for some operational savings, the company said.
Holders of about 20.5 percent of American Oil & Gas common shares have agreed to vote in favor of the merger, Hess said.
Hess was advised by Goldman Sachs & Co. on the deal, while Tudor, Pickering, Holt & Co. advised American Oil & Gas, the companies said.
Hess shares closed at $53.30 on the New York Stock Exchange on Tuesday.
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