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EXHIBIT 99.1
[SANTE FE ENERGY RESOURCES, INC. LETTERHEAD]
SANTA FE ENERGY RESOURCES AND SNYDER OIL CORPORATION
ANNOUNCE MERGER
Houston, Texas - January 13, 1999
Santa Fe Energy Resources (NYSE:SFR) ("Santa Fe") and Snyder Oil Corporation
(NYSE:SNY) ("Snyder") today announced the signing of a definitive agreement to
merge the two companies. The new company, Santa Fe Snyder Corporation, will be
headquartered in Houston.
The combination of Santa Fe and Snyder creates an exploration and production
company with a market capitalization in excess of $1 billion and estimated 1998
year-end reserves of approximately 310 million barrels of oil equivalent (BOE).
Combined production for 1999 is expected to be approximately 110,000 BOE per day
with 55 percent gas and 70 percent domestic. The combined company has a superior
record of growth both in the United States and internationally and has a large
exploitation inventory as well as a substantial portfolio of exploratory
prospects to continue that growth through the drillbit. Based on combined
three-year results including 1998, 260 percent of production was replaced (75
percent from drilling) at a cost of finding and development of approximately
$5.00 per BOE. The combined balance sheet provides the scale and the financial
strength to actively participate in the industry's consolidation.
The Board of Directors for each company has unanimously approved the
transaction, recommends the merger and each director has committed to vote his
or her shares in favor of the merger. Snyder shareholders will receive 2.05
shares of Santa Fe common stock for each share of Snyder resulting in Santa Fe
shareholders owning approximately 60 percent of the outstanding shares after the
merger. The transaction is to be accounted for as a purchase and is expected to
be tax free to Snyder shareholders. John C. Snyder, currently the Chairman and
Chief Executive Officer (CEO) of Snyder will be the Chairman of Santa Fe Snyder
and James L. Payne, currently the Chairman and CEO of Santa Fe will be the CEO
of the new company. The eleven person board will be composed of five members
from Snyder's current directors and six from Santa Fe.
John Snyder said, "We believe that this merger will add substantial value for
our combined shareholder base. Santa Fe's international program exposes the
Snyder shareholders to exceptional upside potential combined with near term
built-in growth. This transaction brings together two very successful and well
capitalized companies with complementary assets and skill sets. The merger is
expected to be accretive to discretionary cash flow per share for both
shareholder groups from the outset."
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Jim Payne said, "Santa Fe Snyder will have the scale, diversity of operations
and financial strength to become one of the very top independent exploration and
development companies in the world. Snyder offers a substantial North American
gas resource with upside potential which has been a strategic goal for Santa Fe.
We intend to take advantage of the current conditions in the energy industry to
opportunistically pursue acquisitions of high quality assets worldwide."
Santa Fe Snyder will have significant core areas in the Rocky Mountains, Permian
Basin and Gulf Coast regions of the United States as well as in South America,
West Africa and Southeast Asia. The company will grow through the exploitation
of its combined domestic asset base and the ongoing development of significant
international discoveries. In addition, the company will be exposed to
substantial upside potential through continuation of its successful high impact
exploration programs. Management also expects to reduce costs by $20 million in
the first full year of operations through the elimination of duplicate corporate
overhead in addition to efficiencies created by the combination of the Gulf of
Mexico operations.
Each of the companies has a strong track record with regard to consistent
production and reserve growth. On a combined basis the companies achieved in
1998 an average production of approximately 101 thousand BOE per day, a 20
percent increase over 1997 excluding the corporate dispositions in 1997 by each
company. Combined reserves at yearend are estimated to be approximately 310
million BOE, representing reserve replacement of almost 300 percent. The
combined companies have a three -year blended finding and development cost of
approximately $5.00 per BOE having added over 250 million BOE in the last three
years.
On January 27, Santa Fe intends to announce its full year financial results for
1998. Santa Fe estimates that its reserves as of January 1, 1999 will be
approximately 210 million BOE, representing a replacement ratio of 255 percent.
For the year, production is estimated to be approximately 70 thousand BOE per
day, an 18 percent increase over 1997, excluding the distribution of Monterey
Resources. Due to the low commodity price environment, Santa Fe expects to take
an impairment charge of up to $100 million primarily in Santa Fe's Gulf of
Mexico division.
On February 11, Snyder is scheduled to announce its full year financial results.
The Company estimates that January 1, 1999 reserves will be approximately 100
million BOE, representing a replacement ratio of almost 400 percent. For the
year, production is estimated to be approximately 31 thousand BOE per day, a 25
percent increase over 1997 excluding the sale of Patina Oil and Gas Corporation.
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Combined Company Highlights
Financial
o Total enterprise value of approximately $1.6 billion
o Equity market capitalization of approximately $1.1 billion
Operational
o Total proved reserves approximately 310 million BOE
o Total estimated 1999 production approximately 110 thousand BOE per day
Estimated Reserves and Production Data
Santa Fe Snyder Combined
-------- ------ --------
1998 Proved Reserves (million BOE)
Domestic 101.0 100.0 201.0
International 109.0 -- 109.0
----- ----- -----
Total 210.0 100.0 310.0
===== ===== =====
1998 Estimated Production (thousand BOE/D) -
Domestic 46.0 31.0 77.0
International 24.0 -- 24.0
----- ----- -----
Total 70.0 31.0 101.0
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Transaction Summary
Combined company name - Santa Fe Snyder Corporation
Exchange ratio - 2.05 Santa Fe: 1 Snyder
Equity split - Santa Fe 60 percent, Snyder 40 percent
Estimated shares outstanding - 170.5 million
Accounting - Purchase method
Donaldson, Lufkin & Jenrette Securities Corporation and Chase Securities, Inc.
acted as financial advisors to Santa Fe, and Petrie Parkman & Co. acted as
financial advisor to Snyder.
The transaction is subject to shareholder approvals, expiration of the
Hart-Scott-Rodino waiting period and other customary closing conditions and
regulatory approvals. Completion of the merger is expected in the second quarter
of 1999.
The issuance of Santa Fe stock in the merger will be made only by means of a
prospectus.
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Santa Fe is a worldwide oil and gas exploration and development company with
domestic operations in the Permian basins of West Texas and Southeast New
Mexico, the Gulf of Mexico and international activities in Indonesia, Argentina,
Gabon, China, Brazil, Cote d Ivoire, Malaysia and Ghana. Santa Fe is listed on
the New York Stock Exchange under the ticker symbol SFR. Additional information
is available on Santa Fe's Web site at http://www.sfer.com.
Snyder Oil Corporation is engaged in the production, development, acquisition
and exploration of domestic oil and gas properties, primarily in the Gulf of
Mexico, the Rocky Mountains and northern Louisiana. Snyder also has investments
in two international exploration and production companies, SOCO International
plc and Cairn Energy plc. Snyder's shares are traded on the New York Stock
Exchange under the symbol SNY. Additional information is available on Snyder's
Web site at http://www.snyderoil.com
Contacts: Santa Fe Energy Resources
Kathy E. Hager
(713) 507-5315
Snyder Oil Corporation
Rodney L. Waller
(817) 882-5937
This press release includes "forward looking statements" as defined by the
Securities and Exchange Commission. Such statements are those concerning the
companies' plans, synergies, expectations and objectives for future operations.
All statements, other than statements of historical facts, included in this
press release that address activities, events or developments that the companies
expect, believe or anticipate will or may occur in the future are forward -
looking statements. This includes completion of the proposed merger, reserve
estimates, future production of oil and gas, future financial performance and
other matters. These statements are based on certain assumptions, which the
companies believe are reasonable, but which are subject to a wide range of
uncertainties and business risks. Factors that could cause actual results to
differ materially from those anticipated are discussed in both companies'
periodic filings with the Securities and Exchange Commission, including their
Annual Reports on Form 10-K for the year ended December 31, 1997.
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