PETROCORP INC company history: the story so far

History

PetroCorp, a Tulsa-based US oil and gas producer, bought Southern Mineral in 2001, then agreed in 2003 to sell itself to Unit Corporation, completing the sale in early 2004.

2001-2002: Buying Southern Mineral

PetroCorp was a Tulsa-based explorer and producer working in the Mid-Continent and Gulf Coast regions of the US, led by President and CEO Gary R. Christopher. In June 2001 it completed its purchase of Southern Mineral Corporation, merging a PetroCorp subsidiary into it, for about $74 million including debt the company took on.

Southern Mineral holders could choose PetroCorp stock, but elections exceeded the 4 million shares available. Those who chose stock received about 0.416 PetroCorp shares plus $0.55 in cash per share, down from the 0.471 shares first offered. Everyone else received $4.71 in cash per share. The same year, PetroCorp ran a small buyback, taking in 305,907 of its own shares for $2.7 million. The record for 2002 is quiet.

2003: Buyback, then a sale

In March 2003 the board authorised a far larger buyback, of up to a quarter of its 12.7 million shares, calling the stock cheap. Just over three months later, in July, PetroCorp agreed in principle to sell itself to Unit Corporation for about $190 million, made up of 2 million Unit shares plus cash. Management called it the final step in returning maximum value to shareholders.

In September the company filed a preliminary proxy statement, the document asking shareholders to vote. Shareholders would receive at least about $13.37 in cash per share at closing, plus up to $0.50 per share held back for three contingent liabilities, for a maximum of about $13.87. The deal was valued at up to $182.12 million. Approval needed two-thirds of shares, and holders of about 51% of voting power had agreed to vote in favour.

2004: The end of a listed company

On January 2, 2004, PetroCorp filed the final proxy for a special meeting on January 30. The terms were unchanged. Shareholders were also asked to let management adjourn and reconvene the meeting up to May 31, 2004.

Shareholders approved the merger in January. On February 2, 2004, PetroCorp stopped reporting to the SEC, and on February 5 its securities were notified for removal from the American Stock Exchange. Holders were bought out for cash and Unit stock. As of February 5, 2004, PetroCorp was no longer a listed company, and resolution of the three contingent liabilities was the remaining open matter.

Written from the 7 story beats below (2001 to 5 Feb 2004), which come from the company's own announcements and filings.

Beat by beat

The events that changed the company's story, in plain English, each written against everything known about the company at the time. The dot shows whether it was good, bad or neutral for shareholders.

2004

5 Feb
PETROCORP INC's securities were notified for removal from listing and registration on its exchange.
listing compliance notice
2 Feb
PetroCorp stopped reporting to the SEC and came off the American Stock Exchange days later, the Unit Corporation merger having been approved by shareholders in January. Holders were bought out for cash and Unit stock; the company did not go dark or fail.
listing compliance notice
2 Jan
PetroCorp filed the final proxy statement for a special shareholder meeting on January 30, 2004, to vote on the Unit Corporation merger. Terms are unchanged at a minimum of $13.37 cash per share at closing, with up to $0.50 more held back for three contingent liabilities but capped so the total does not exceed $13.87. Shareholders will also vote on letting management adjourn and reconvene the meeting up to May 31, 2004; the board's approval is described as approval, no longer 'unanimous' as in the preliminary version.
business combination

2003

17 Sept
PetroCorp filed a preliminary proxy statement asking shareholders to approve a merger in which Unit Corporation would acquire it, following the July 2003 letter of intent. Shareholders would receive a minimum of about $13.37 in cash per share at closing, plus up to $0.50 per share set aside for three contingent liabilities (up to about $13.87 total), with the deal valued at a maximum of $182,120,000. Approval needs two-thirds of outstanding shares, holders of about 51% of voting power have agreed to vote in favour, and the board unanimously recommends it; the meeting date is still blank.
business combination
1 July
PetroCorp agreed in principle to sell itself to Unit Corporation for about $190 million - 2 million Unit shares plus cash - just over three months after announcing a buyback of a quarter of its stock. Management called it the final step in returning maximum value to shareholders.
business combination
20 Mar
PetroCorp's board authorised buying back up to a quarter of its 12.7 million shares, calling the stock cheap - a much larger follow-on to the 2001 programme that had taken in 305,907 shares for $2.7 million. Within a year the company had deregistered and left the American Stock Exchange.
asset acquisition disposition

2001

21 June
PetroCorp completed its acquisition of Southern Mineral Corporation on June 6, 2001, by merging a PetroCorp subsidiary into it, at a price of about $74 million including assumed debt. Southern Mineral holders could take PetroCorp stock, but elections exceeded the 4 million shares available, so those electing stock get about 0.416 PetroCorp shares plus $0.55 cash per share (down from 0.471 shares), and others get $4.71 cash per share. Financial statements for the acquired business are to follow by amendment.
asset acquisition disposition