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On February 12, 2004, Nuevo Energy agreed to be acquired by Plains Exploration and Production [Note 1] in a transaction valued at $495 million. Plains Exploration and Production will issue up to 37.4 million shares of common stock to Nuevo shareholders and assume $234 million in debt and $115 million of trust convertible preferred securities [Note 2]. Nuevo stockholders will receive 1.765 shares of Plains Exploration and Production's common stock for each share of Nuevo common stock. The transaction will be accounted for as a purchase of Nuevo by Plains Exploration and Production under purchase accounting rules and Plains Exploration and Production will continue to use the full cost method of accounting for its oil and gas properties.
The following link provides company-level data from various public sources to inform discussions of the Plains Exploration and Production - Nuevo merger. This data presentation is similar to data presentations that have been previously requested from EIA for other significant energy company mergers and/or corporate alliances.
Note 1. Prior to December 18, 2002 Plains Exploration and Production was a wholly owned subsidiary of Plains Resources Inc., or Plains Resources.
Note 2. Trust convertible preferred securities are a quasi-security that can be converted into equity under certain circumstances. (See financial web sites, such as Investopedia.com, for more information on trust convertible preferred securities and other types of convertible securities.)
Financial Analysis Team, Office of Energy Markets and End Use, Energy Information Administration, March 4, 2004
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National Energy Information CenterURL: http://www.eia.doe.gov/emeu/finance/mergers/np_index.html
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