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Filed by Stone Energy Corporation and
Basin Exploration, Inc. pursuant to Rule
425 under the Securities Act of 1933 and
deemed filed pursuant to Rule 14a-12 of
the Securities Act of 1934
Stone Energy Commission File No.: 001-12074
Basin Exploration Commission File No.: 000-20125
Subject Company: Basin Exploration, Inc.
THE FOLLOWING IS A SLIDE PRESENTATION USED IN CONNECTION WITH INVESTOR AND
ANALYST MEETINGS.
Stone Energy Corporation
Basin Exploration, Inc.
Slide 1 [Stone Energy Corporation Logo Basin
Exploration, Inc. Logo]
Slide 2 [Safe Harbor Language]
PRIVATE SECURITIES LITIGATION REFORM ACT SAFE HARBOR STATEMENT
Except for the historical and present factual information contained herein, the
matters set forth in this presentation, 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 the anticipated benefits from the merger cannot be fully
realized, 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 Stone's and Basin's reports filed with the SEC. Stone and Basin disclaim
any responsibility to update these forward-looking statements.
Slide 3 [Transaction Summary]
Listing of Following Bullets:
- --Structure: Stock-For Stock; Pooling; Tax-Free
- --Exchange Ratio: .3974 Stone Shares per Basin Share
- --Premium: 10% One day prior; 14% 30-day average
- --Targeted Closing: Early 2001
Slide 4 [Acquisition Rationale]
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Listing of Following Bullets:
- --Expanded portfolio of prospects in our core area, the Gulf Coast Basin
- --Increased size and financial strength
--Enhanced ability to compete
--Strategic flexibility
- --GOM property proximity yields technical, operational and infrastructure
synergies
- --Solid foundation of combined proved reserves
- --Financially compelling
--Accretive per share on cash flow, earnings and reserves
--Maintains strong balance sheet
--Hedging program underwrites investment
Statement at bottom of slide: "New Growth Opportunities as Combined Entity"
Slide 5 [Complementary Exploration Expertise]
Describes combination of Stone's strengths of detailed field analysis and
exploration of mature fields with Basin's strengths of new lease prospect
generation.
Listing of following bullets related to the combined company:
- --Unlock value in combined property base
--43 producing properties
--52 unexplored primary term leases
- --Inventory of 179 identified prospects
- --Leverage leasehold positions
Statement at the bottom of the slide: "Enhance Combined Asset Value"
Slide 6 [Stone Area of Operations]
Depicts map of Gulf Coast Basin identifying the location of Stone's 21 producing
properties.
Slide 7 [Combined Property Base]
Depicts map of Gulf Coast Basin identifying the location of Stone's 21 producing
properties and Basin's 22 producing properties.
The following information regarding pro forma proved reserves at 12/31/99 was
shown in tabular form:
Bcfe % Total % Gas
---- ------- -----
Gulf Coast Basin
Onshore 96 16% 28%
Offshore 426 71 79
Rocky Mountain 75 13 32
--- --- ---
Total 597 100% 65%
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Slide 8 [Stone Exploration Leases]
Depicts map of Gulf Coast Basin identifying the location of Stone's 5
exploratory leases, Stone's 21 producing properties and Basin's 22 producing
properties.
Slide 9 [Increased Exploration Portfolio]
Depicts map of Gulf Coast Basin identifying the location of Stone's 5
exploratory leases, Basin's 48 exploratory leases, Stone's 21 producing
properties and Basin's 22 producing properties.
Depicts map of Western United States with portions of Wyoming, Utah, Colorado,
New Mexico and Arizona highlighted to identify Basin's Rocky Mountain interests.
Slide 10 [Increased Exploration Portfolio]
Depicts map of Gulf Coast Basin identifying Stone's 5 exploratory leases,
Basin's 48 exploratory leases, Stone's 21 producing properties, Basin's 22
producing properties and 9 Stone ready Basin prospects.
Slide 11 [Impressive Growth]
The following information regarding cash flow From operations ($MM) appears via
bar chart:
--Stone Actual Cash Flow from Operations
--1996 $37
--1997 $47
--1998 $77
--1999 $101
--Pro Forma Cash Flow From Operations
--1999 $153
--2000 $300
--Arrow on the bar graph depicts a compounded annual growth rate of
cash flow from operations of 40% for Stone from 1996-1999.
--Arrow on the bar graph depicts a 96% growth in cash flow from
operations from 1999 to 2000e for the pro forma company.
--Statement at the top of the graph states: "2001 Projection Pro Forma
Growth over 20%"
The following information regarding Production (Bcfe) appears via bar chart:
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--Stone Actual Production
--1996 19.5
--1997 23.7
--1998 50.5
--1999 57.6
--Pro Forma Production
--1999 91.5
--2000 100.6
--Arrow on the bar graph depicts a compounded annual growth rate of
production of 44% for Stone from 1996-1999.
--Arrow on the bar graph depicts a 11% growth in production from 1999
to 2000e for the pro forma company.
--Statement at the top of the graph states: "2001 Projection Pro Forma
Growth over 15%"
- --Statement at the bottom of slide states: "Significant Cash Flow & Production
Growth"
Slide 12 [Strengthened Competitive Position]
The following information appears via bar charts:
- --Market Capitalization ($MM) (10/27/00) (1)
--APA 6660.2
--OEI 2373.9
--NBL 1983.0
--NFX 1571.9
--PF SGY 1408.6
--FST 1289.3
--PPP 1004.6
--SGY 1000.5
--SKE 806.5
--THX 675.2
--BSNX 362.2
--TMR 328.0
--CID 318.2
--EEX 207.1
--MMR 188.4
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- --2001 Discretionary Cash Flow ($MM) (2)
--APA 1589.2
--OEI 702.8
--NBL 514.4
--PF SGY 402.2
--NFX 369.1
--FST 354.6
--SGY 256.5
--THX 233.2
--PPP 220.0
--EEX 140.2
--BSNX 138.9
--SKE 137.7
--TMR 135.0
--CID 85.6
--MMR 32.2
- --Total Debt to Book Capitalization (1)
--MMR 0.0%
--SKE 6.0%
--CID 6.6%
--BSNX 18.3%
--PF SGY 23.4%
--SGY 25.0%
--NFX 26.7%
--NBL 41.3%
--APA 41.7%
--THX 44.1%
--PPP 45.2%
--FST 50.0%
--EEX 51.0%
--TMR 57.7%
--OEI 60.0%
Reserves (Bcfe)(1)
--APA 4843.0
--OEI 2490.0
--NBL 1995.3
--FST 1408.1
--PPP 847.4
--PF SGY 596.9
--NFX 594.8
--THX 541.0
--SGY 387.4
--EEX 375.5
--TMR 364.6
--CID 239.6
--BSNX 209.5
--SKE 104.5
--MMR 94.0
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Statement at the bottom of the slide: "Well Positioned for Future Opportunities"
(1) Publicly available data as of October 27, 2000
(2) I/B/ES estimates as of October 27, 2000. Stone pro forma estimates
provided by Stone Management.
Slide 13 [Attractive Proved Reserve Economics]
Depicts two tables with the following information:
Compelling Economics
- --At $3.50/mcf and $25.00/Bbl, acquired proved reserves produce:
--4 year payout
--14% rate of return
Hedging Program Reduces Price Risk
- --2001 and 2002 volumes
- --Puts at $3.50/Mcf and $25.00/BbL
- --28% of pro forma production volumes
- --Estimated cost - $25 MM
Slide 14 [Proved Reserves by Category]
Depicts bar graph of proved reserves (Bcfe) by category for Stone, Basin and
Stone Pro Forma at 12/31/99
PDP PDNP PUD Total
Stone 114.8 196.9 75.7 387.4
Basin 94.5 54.7 60.4 209.6
Stone Pro Forma 209.3 251.6 136.1 597.0
Slide 15 [Acquisition Rationale]
Depicts bullet points as follows:
- --Expanded portfolio of prospects in our core area, the Gulf Coast Basin
- --Increased size and financial strength
- --GOM property proximity yields synergies
- --Solid foundation of combined proved reserves
- --Financially compelling
Statement at bottom states: "New Growth Opportunities as Combined Entity"
Slide 16 [Additional Information]
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Additional Information
Stone and Basin 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 BECOMES 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
website maintained by the SEC at www.sec.gov. In addition, you may obtain
documents filed with the SEC by Stone free of charge by requesting them in
writing from Stone Energy Corporation, 625 East Kaliste Saloom Road, Lafayette,
Louisiana 70508, Attention: Corporate Secretary, or by telephone at (337)
237-0410. You may obtain documents filed with the SEC by Basin free of charge by
requesting them in writing from Basin Exploration, Inc., 1670 Broadway, Suite
2800, Denver, Colorado, 80202, or by telephone, (303) 685-8000.
Stone and Basin, and their respective directors and executive officers, may be
deemed to be participants in the solicitation of proxies from the stockholders
of Stone and Basin in connection with the merger. Information about the
directors and executive officers of Stone and their ownership of Stone stock is
set forth in the proxy statement for Stone's 2000 Annual Meeting of
stockholders. Information about the directors and executive officers of Basin
and their ownership of Basin stock is set forth in the proxy statement for
Basin's 2000 Annual Meeting of stockholders. 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.