Voyager Oil & Gas in Emerald Oil deal

Voyager Oil & Gas has acquired Emerald Oil, a subsidiary of Emerald Oil & Gas, to create a US-based oil and gas company that will focus on select oil and gas basins in the Rocky Mountain region fpr $40m.

Under the terms of the purchase agreement, Voyager will acquire 100% of Emerald Oil’s outstanding equity interests in exchange for up to 19.9% of Voyager common stock, and assume approximately $19 million of Emerald Oil’s outstanding debt.

Upon closing, Voyager’s existing shareholders will own approximately 80% of the combined company with Emerald owning the remaining 20%.

The transaction will combine the companies’ oil-producing assets in the Williston Basin, specifically in the Bakken and Three Forks plays located in North Dakota and Montana, with Emerald Oil’s acreage position focusing on the Niobrara shale in the Sandwash Basin located in Colorado and Wyoming.

The companies stated the combination is intended to create an oil and gas company with operating capabilities that can manage a multi-rig drilling programme in the Rocky Mountains, and extract maximum value from both of its operated and non-operated drilling programmes.

Emerald Oil president McAndrew Rudisill said, "Today’s announcement accelerates our strategy of using our position in the Williston Basin to create a company focused on Bakken and Three Forks development, two of the most prolific and extensive shale oil plays in the US."

Voyager CEO JR Reger, who will serve as executive chairman of the combined company, said, "The combination of our two companies will enable our business operations to realise their full potential, continue to grow and deliver value for shareholders."

Emerald Oil will be headquartered in Denver, Colorado, and will begin the transition to an operating business model with its first operated well in Dunn County, North Dakota, planned to spud in early 2013.

This will be followed by a continuous single-rig drilling programme in 2013.

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Image: Emerald Oil will manage a multi-rig drilling programme in the Rocky Mountains. Photo: Massimo Catarinella.