Hess Corporation (NYSE: HES) and American Oil & Gas Inc. (NYSE-AMEX:
AEZ) jointly announced today that Hess has agreed to acquire American
Oil & Gas pursuant to a merger agreement approved by the Boards of
Directors of both companies in an all-stock transaction. The acquisition
will increase Hess′ strategic acreage position in the Bakken oil play in
North Dakota by approximately 85,000 net acres.
Under terms of the agreement, Hess has agreed to issue 0.1373 shares of
its common stock in exchange for each outstanding share of American Oil
& Gas′ common stock. This represents a 9.4 percent premium to American
Oil & Gas stockholders based on the closing stock prices of Hess′ and
American Oil & Gas′ shares on July 27, 2010. It is expected that Hess
would issue approximately 8.6 million shares for all outstanding
American Oil & Gas shares and options on a net settlement basis. The
merger agreement provides for a possible cash dividend to American Oil &
Gas′ stockholders to the extent of American Oil & Gas′ positive working
capital as of the closing date (subject to certain adjustments that are
described in the merger agreement) and subject to available cash. Hess
has committed (subject to the terms and conditions of a customary
commitment letter) to provide American Oil & Gas with a $30 million
working capital credit facility to help finance American Oil & Gas′
planned exploration and production activities and other working capital
needs prior to the closing of the transaction.
'This acquisition builds upon our strong land position in the Bakken,
leverages our nearby infrastructure and offers operational synergies,?
said Greg Hill, President of Worldwide Exploration and Production at
Hess.
'We believe this transaction captures the value that we have been able
to create since our initial entry in the North Dakota Bakken play four
years ago,? said Pat O′Brien, CEO of American Oil & Gas. 'We are excited
about the leverage our stockholders will gain not only to Hess′
compelling Bakken position and developmental activities, but also to
Hess′ large and diverse global project portfolio.?
The transaction is subject to customary closing conditions, including
approval of American Oil & Gas′ shareholders. Holders of approximately
20.5 percent of American Oil & Gas common stock have agreed to vote
their shares in favor of the merger. Completion of the transaction is
expected in the fourth quarter of 2010. In connection with the
transaction, Goldman, Sachs & Co. is acting as financial advisor to
Hess, and Tudor, Pickering, Holt & Co. Securities Inc. is acting as
financial advisor and provided a Fairness Opinion to American Oil & Gas.
Legal counsel is being provided by White & Case LLP for Hess, and Patton
Boggs LLP for American Oil & Gas.
About Hess Corporation
Hess, with headquarters in New York, is a global integrated energy
company engaged in the exploration, production, purchase, transportation
and sale of crude oil and natural gas, as well as the production and
sale of refined petroleum products. More information on Hess is
available at
About American Oil & Gas Inc.
American Oil & Gas is an independent oil and natural gas company engaged
in exploration, development and production of hydrocarbon reserves
primarily in the Rocky Mountain region. Additional information about
American Oil & Gas is available via the Company's website at
Important Information for Investors and Stockholders
This communication shall not constitute an offer to sell or the
solicitation of an offer to buy any securities, a solicitation of any
vote or approval, nor shall there be any sale of securities in any
jurisdiction in which such offer, solicitation or sale would be unlawful
prior to registration or qualification under the securities laws of any
such jurisdiction. No offering of securities shall be made except by
means of a prospectus meeting the requirements of Section 10 of the
Securities Act of 1933, as amended. This communication is being made in
respect of the proposed merger transaction involving Hess and American
Oil & Gas. In connection with the proposed transaction, Hess will file
with the Securities and Exchange Commission (the 'SEC?) a registration
statement on Form S-4 containing a proxy statement/prospectus. Hess and
American Oil & Gas also plan to file other documents with the SEC
regarding the proposed transaction. The proposed merger transaction
involving Hess and American Oil & Gas will be submitted to American Oil
& Gas′ stockholders for their consideration and a definitive proxy
statement/prospectus will be mailed to American Oil & Gas′ stockholders.
INVESTORS AND SECURITY HOLDERS OF American Oil & Gas ARE URGED TO READ
THE PROXY STATEMENT/PROSPECTUS AND OTHER DOCUMENTS REGARDING THE
PROPOSED TRANSACTION THAT WILL BE FILED WITH THE SEC CAREFULLY AND IN
THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and
stockholders will be able to obtain free copies of the proxy
statement/prospectus and other documents containing important
information about Hess and American Oil & Gas, once such documents are
filed with the SEC, through the website maintained by the SEC at http://www.sec.gov.
Copies of the documents filed with the SEC by Hess will be available
free of charge on Hess′ internet website at www.hess.com
or by contacting Hess′ Corporate Secretary Department at 212-536-8602.
Copies of the documents filed with the SEC by American Oil & Gas will be
available free of charge on American Oil & Gas′ internet website at or by contacting American Oil & Gas′ Investor Relations
Department at 303-449-1184.
Hess,American Oil & Gas, their respective directors and
executive officers and other persons may be deemed to be participants in
the solicitation of proxies from the stockholders of American Oil & Gas
in connection with the proposed transaction. Information about the
directors and executive officers of Hess is set forth in its proxy
statement for its 2010 annual meeting of stockholders and in its annual
report on Form 10-K, which were filed with the SEC on March 25, 2010 and
February 26, 2010, respectively. Information about the directors and
executive officers of American Oil & Gas is set forth in its proxy
statement for its 2010 annual meeting of stockholders and in its annual
report on Form 10-K, which were filed with the SEC on May 14, 2010 and
March 15, 2010, respectively. Other information regarding the
participants in the proxy solicitation and a description of their direct
and indirect interests, by security holdings or otherwise, will be
contained in the proxy statement/prospectus and other relevant materials
to be filed with the SEC when they become available.
Cautionary Statement Regarding Forward-Looking Statements
Some statements contained in this joint news release are
'forward-looking statements? within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended, including, but not limited to,
statements relating to Hess′ planned acquisition of American Oil & Gas
and the expected terms and timing of the transaction, and are intended
to be covered by the safe harbor created by those Sections. Words such
as 'expect(s),? 'believe(s),? 'will,? 'may,? 'anticipate(s),?
'estimate(s),? 'should,? 'intend(s),? and similar expressions are
intended to identify forward-looking statements. Such forward-looking
statements are based on current understanding and assessment of relevant
factors and reasonable assumptions about the future. Actual results
could differ materially as a result of a variety of risks and
uncertainties, including: the ability to obtain the approval of the
transaction by American Oil & Gas′ stockholders; the timing to
consummate the proposed transaction; the risk that a condition to
closing of the proposed transaction may not be satisfied; the risk that
a consent that may be required for the proposed transaction is not
obtained or is obtained subject to conditions that are not anticipated;
Hess′ ability to achieve the synergies and value creation contemplated
by the proposed transaction; Hess′ ability to promptly and effectively
integrate American Oil & Gas′ businesses; and the diversion of
management time on transaction-related issues. Other factors that could
materially affect Hess′ and American Oil & Gas′ actual results include
the success rate of drilling efforts and the timeliness of development
activities, their dependence on future drilling success to produce
revenues, fluctuations in oil and gas prices, and other risk factors
described from time to time in each company's reports filed with the
SEC. No assurances can be given that any of the events anticipated by
the forward-looking statements will transpire or occur, or if any of
them do so, what impact they will have on the results of operations or
financial condition of Hess or American Oil & Gas. Given these
uncertainties, investors are cautioned not to place undue reliance on
such forward-looking statements. Hess and American Oil & Gas disclaim
any intent or obligation to update publicly any forward-looking
statements set forth in this news release, whether as a result of new
information, future events or otherwise. References to quantities of oil
or natural gas may include amounts that Hess or American Oil & Gas
believe will ultimately be produced, but that are not yet classified as
'proved reserves? under SEC definitions.
