Petrohawk acquisition financing to include increase to first-, second-lien facilities via BNP

By Sara Rosenberg

New York, April 24 - Petrohawk Energy Corp. is planning on increasing its first- and second-lien credit facilities for the KCS Energy Inc. acquisition and, as was previously reported, has already received underwritten commitments to do so, according to a company spokesman.

BNP Paribas, the company's current agent bank, will be leading the new financing.

"Sizes, structure and expected draws are to be determined, as well as the plan for the two companies' high-yield bond issuances," the spokesman added.

Under the acquisition agreement, Petrohawk has agreed to pay KCS stockholders $9.00 in cash and 1.65 shares of Petrohawk common stock per share, or collectively $450 million in cash and about 84 million Petrohawk common shares, not including outstanding KCS stock options. Following the transaction, KCS stockholders will own about 50% of the combined company.

On a pro forma basis, the combined company will have estimated proved reserves of about 1 trillion cubic feet of natural gas equivalents of which about 68% would be classified as proved developed and about 82% would be natural gas.

The transaction, which is expected to close in the third quarter, is subject to approval by stockholders of Petrohawk and KCS, and other customary conditions, including regulatory approvals.

Petrohawk is a Houston-based oil and gas exploration and production company.

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