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Gold/Mining/Energy : VELVET EXPLORATION -- A GIFT FOR MAD MONK -- Ignore unavailable to you. Want to Upgrade?

To: goldsnow who wrote (504)	8/25/1999 5:54:00 PM
From: goldsnow	Respond to of 579

Velvet is easily $8 stock...40% premium? Bloomberg Energy Wed, 25 Aug 1999, 5:48pm EDT 8/9 0:00 Calpine to Acquire Sheridan Energy for $128 Million in Cash, Assumed Debt By James Mosher Calpine to Acquire Sheridan Energy for $128 Million (Update1) (Adds details, analyst comment. Updates share activity.) Houston, Aug. 25 (Bloomberg) -- Calpine Corp., a power-plant developer and operator, agreed to buy Sheridan Energy Inc. for $127.7 million in cash and assumed debt to add reserves of natural gas needed to run power plants. San Jose, California-based Calpine is forming a company that will pay $40.7 million, or $5.50 a share, in cash for Sheridan's 7.4 million shares outstanding, a 38 percent premium to yesterday's closing price. Calpine also will assume $87 million in debt, said Michael A. Gerlich, Sheridan's vice president and chief financial officer. The transaction is expected to add 10 cents a share to Calpine's annual earnings beginning in 2000. The purchase helps Calpine in California and Texas, where it operates 11 plants. Sheridan's main operations are in California's Sacramento Basin and in southern Texas. Calpine operates eight plants in California and three in Texas. ''It's a very good deal for Calpine,'' said Michael S. Worms, an analyst at Gerard Klauer Mattison & Co. in New York, who rates Calpine a ''buy.'' ''They'll save a lot in transportation costs. It'll also help with what they're doing in Texas and California.'' Largest Oil And Gas Acquisition Houston-based Sheridan would bring 148 billion cubic feet equivalent of proven oil and natural-gas reserves, 90 percent of which are natural gas. The transaction represents the largest acquisition of an oil and natural-gas company by Calpine, said Katherine Potter, a company spokeswoman. It owns stakes in power plants in 12 states. Sheridan's natural-gas reserves represent about 9 percent of the natural gas needed to run Calpine's plants daily. The reserves give Calpine more to drawn on as it builds new plants and increases capacity at others. ''It's a good strategic move,'' said Worms, who expects Calpine shares to be trading at 100 within the next 12 months. Officers and shareholders representing about 51 percent of Sheridan shares have approved the transaction. It's expected to close by the end of next month. Sheridan has 39 employees. Calpine has 600 workers. A determination on firings hasn't been made, Potter said. In January, Sheridan and Calpine completed a $58 million purchase of natural gas-producing properties in Northern California from Amerada Hess Corp. to fuel new and existing power plants. In a related transaction, Calpine paid $15 million for a 20 percent stake in Sheridan's Northern California natural-gas reserves, totaling 82 billion cubic feet. Sheridan rose 1 11/32, or 34 percent, to 5 11/32 in midafternoon trading of 262,500, nearly 47 times the three-month daily average. Its shares had risen 39 percent in the past year as of yesterday's close. It had 1998 revenue of $18.2 million. Calpine, which 1998 revenue of $528 million, rose 1 9/16 to 86 3/4. Its shares have nearly quadrupled in the past year. Donaldson, Lufkin & Jenrette Securities Corp. advised Sheridan in the transaction. quote.bloomberg.com