CONTACT:
Michael E. Luttrell
Vice President-Finance
and CFO
(713) 658-9444
December 22, 2000
SOUTHERN MINERAL CORPORATION TO BE ACQUIRED BY PETROCORP
INCORPORATED IN STOCK-FOR-STOCK AND CASH TRANSACTION
Houston, Texas - December 22, 2000 Southern Mineral Corporation (OTC Bulletin
Board: SMOP.OB) and PetroCorp Incorporated (AMEX:PEX) today announced they have
executed a definitive agreement regarding Southern Mineral's merger into
PetroCorp. In the merger, shareholders of Southern Mineral will, at their
election, receive for each share of Southern Mineral stock $4.71 per share in
cash, PetroCorp common stock or a combination of cash and stock, subject to
certain adjustments. For both companies, the merger provides strategic and
economic benefits. The operations of the two companies are very complementary,
with PetroCorp primarily operating in the Gulf Coast and Mid-continent areas of
the United States and Southern Mineral primarily operating in the Gulf Coast of
the United States. PetroCorp and Southern Mineral both have significant oil and
gas interests in the province of Alberta, Canada. Additionally, the combined
company will benefit by having a substantially greater critical mass and the
cost savings resulting from the consolidation of operations.
Steven H. Mikel, President and CEO of Southern Mineral, said of the merger:
"Our patience and focus have been rewarded. PetroCorp and Southern Mineral make
a perfect fit for each other. PetroCorp's business platform provides the ready-
made operating resources and experience, inventory of properties, and strategic
plan for Southern Mineral, which recently restructured its operations. In turn,
Southern Mineral provides PetroCorp with additional high-quality properties and
related cash flow."
Gary R. Christopher, President and CEO of PetroCorp stated: "This transaction is
a combination of two "small cap" exploration and production companies each with
excellent asset bases in similar areas of operation. This combination is a
first step in PetroCorp's goal of growing its asset and shareholder base, while
still maintaining a low cost of general and administrative expense through
PetroCorp's management agreement with Kaiser-Francis Oil Company. The new
PetroCorp will be larger, have stronger cash flow, greater shareholder liquidity
and be poised to be even more aggressive in seeking additional merger,
acquisition and/or exploration partners."
In connection with the merger, PetroCorp will not be obligated to issue more
than four million or less than three million shares of common stock. The merger
is subject to customary conditions to closing, including obtaining shareholder
and regulatory approvals and, consents having shareholders elect to receive at
least three million shares of PetroCorp stock, which is expected to result in a
tax free reorganization. The transaction is anticipated to close by April 30,
2001.
Frederic Dorwart, LLP served as legal advisor to PetroCorp. Petrie Parkman and
Co. acted as financial advisor to Southern Mineral and provided a fairness
opinion to Southern Mineral and Akin, Gump, Strauss, Hauer and Feld, LLP
provided legal counsel to Southern Mineral.
Southern Mineral Corporation is an independent oil and gas company engaged in
the acquisition, exploitation, exploration and operation of oil and gas
properties, primarily along the Gulf Coast of the United States, in Canada and
in Ecuador.
PetroCorp Incorporated is an independent energy company engaged in the
acquisition, exploration and development of oil and gas properties, and in the
production of oil, natural gas liquids and natural gas in North America.
PRIVATE SECURITES LITIGATION REFORM ACT SAFE HARBOR STATEMENT
Except for historical and present factual information contained herein, the
matters set forth in this press release, including statements as to the expected
benefits of the merger such as efficiencies, cost savings, market profile and
financial strength, and the competitive ability and position of the combined
company, and other statements identified by words such as "expects," "projects,"
"plans," and similar expressions are forward-looking statements within the
meaning of the "safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements are subject to risks and
uncertainties that may cause actual results to differ materially, including the
possibility that costs or difficulties related to the integration of our
businesses will be greater than expected, the impact of competition and other
risk factors relating to our industry as detailed from time to time in each of
PetroCorp's and Southern Mineral's reports filed with the SEC. PetroCorp and
Southern Mineral disclaim any responsibility to update these forward-looking
statements.
ADDITIONAL INFORMATION
Southern Mineral Corporation and PetroCorp Incorporated will file a proxy
statement/prospectus and other relevant documents concerning the proposed merger
transaction with the SEC. INVESTORS ARE URGED TO READ THE PROXY
STATEMENT/PROSPECTUS WHEN IT BEOMES AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS
FILED WITH THE SEC BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. You will be
able to obtain the documents free of charge at the web site maintained by the
SEC at www.sec.gov. In addition, you may obtain documents filed with the SEC by
Southern Mineral free of charge by requesting them in writing from Southern
Mineral Corporation Attn: Investor Relations, 1201 Louisiana Street, Suite
3350, Houston, TX 77002. You may obtain documents filed with the SEC by
PetroCorp free of charge by requesting them in writing from PetroCorp
Incorporated, Attn: Investor Relations, P.O. Box 21298, Tulsa, Oklahoma 74121-
1298, or by telephone, (918) 491-4500.
Southern Mineral Corporation and PetroCorp Incorporated and their respective
directors and executive officers, may be deemed to be participants in the
solicitation of proxies from the shareholders of Southern Mineral Corporation
and PetroCorp Incorporated in connection with the merger. Information about the
directors and executive officers of PetroCorp and their ownership of PetroCorp
stock is set forth in the proxy statement for PetroCorp's 2000 Annual Meeting of
shareholders. Information about the directors and executive officers of
Southern Mineral and their ownership of Southern Mineral stock is set forth in
the Southern Mineral Annual Report for the fiscal year ended December 31, 1999.
Investors may obtain additional information regarding the interests of such
participants by reading the proxy statement/prospectus when it becomes
available.
Investors should read the proxy statement/prospectus carefully when it becomes
available before making any voting or investment decisions.
NOTE TO EDITORS: Today's news release, along with other news about Southern
Mineral Corporation and PetroCorp Incorporated, is available on the Internet at
www.petrocorp.com.