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Offer to Purchase for Cash
All Outstanding Shares of Common Stock
and
All Outstanding Shares of Series A Convertible Preferred Stock
of
TEXOIL, INC.
at
$8.25 NET PER SHARE OF COMMON STOCK
and
$18.04 NET PER SHARE OF SERIES A CONVERTIBLE PREFERRED STOCK
by
OEI ACQUISITION CORP.,
a wholly-owned subsidiary of
OCEAN ENERGY, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FEBRUARY 22, 2001 UNLESS THE OFFER IS EXTENDED.
January 24, 2001
To Our Clients:
Enclosed for your consideration are an Offer to Purchase, dated January 24,
2001 (the "Offer to Purchase"), and the related Letter of Transmittal (which, as
each may be amended from time to time, together constitute the "Offer") in
connection with the Offer by OEI Acquisition Corp., a Nevada corporation (the
"Offeror") and a wholly-owned subsidiary of Ocean Energy, Inc., a Texas
Corporation ("Parent"), to purchase (i) all the outstanding shares of common
stock, par value $.01 per share (the "Common Shares"), of Texoil, Inc. (the
"Company") at a purchase price of $8.25 per share, net to the seller, in cash,
without interest (such price referred to herein as the "Common Share Offer
Price"), and (ii) all the outstanding shares of Series A Convertible Preferred
Stock, par value $.01 per share (the "Preferred Shares," and, together with the
Common Shares, the "Shares"), of the Company at a purchase price of $18.04 per
share, net to the seller, in cash, without interest (such price referred to
herein as the "Preferred Share Offer Price") upon the terms and subject to the
conditions set forth in the Offer to Purchase.
Also enclosed is the letter to stockholders of the Company from the
Chairman of the Board of the Company, and the Company's
Solicitation/Recommendation Statement on Schedule 14D-9.
Holders whose certificates evidencing Common Shares (the "Certificates")
are not immediately available or who cannot deliver their Certificates and all
other documents required by the Letter of Transmittal to the Depositary prior to
the Expiration Date (as such terms are defined in the Offer to Purchase) or who
cannot complete the procedure for delivery by book-entry transfer to the
Depositary's account at the Book-Entry Transfer Facility (as defined in Section
3 -- "Procedures for Tendering Shares" of the Offer to Purchase) on a timely
basis and who wish to tender their Common Shares must do so pursuant to the
guaranteed delivery procedure described in Section 3 -- Procedures for
Tendering Shares" of the Offer to Purchase. See Instruction 2 of the Letter of
Transmittal. Delivery of documents to the Book-Entry Transfer Facility in
accordance with the Book-Entry Transfer Facility's procedures does not
constitute delivery to the Depositary.
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THIS MATERIAL IS BEING SENT TO YOU AS THE BENEFICIAL OWNER OF COMMON SHARES
HELD BY US FOR YOUR ACCOUNT BUT NOT REGISTERED IN YOUR NAME. WE ARE (OR OUR
NOMINEE IS) THE HOLDER OF RECORD OF COMMON SHARES HELD BY US FOR YOUR ACCOUNT. A
TENDER OF SUCH COMMON SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND
PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS BEING FURNISHED TO
YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER COMMON SHARES
HELD BY US FOR YOUR ACCOUNT.
We request instructions as to whether you wish to have us tender on your
behalf any or all of the Common Shares held by us for your account upon the
terms and subject to the conditions set forth in the Offer to Purchase and the
related Letter of Transmittal.
Please note the following:
1. The tender price for the Common Shares is $8.25 per share (the
"Common Share Offer Price"), net to you in cash, without interest thereon,
upon the terms and subject to the conditions of the Offer.
2. The Offer and withdrawal rights will expire at 12:00 midnight, New
York City time, on February 22, 2001, unless the Offer is extended.
3. The Offer is being made pursuant to an Agreement and Plan of
Merger, dated as of January 18, 2001 (the "Merger Agreement"), by and among
the Company, Parent and the Offeror which provides, among other things, for
the commencement of the Offer by the Offeror and further provides that
after the purchase of a majority of the Common Shares and a majority of the
Preferred Shares pursuant to the Offer, subject to the satisfaction or
waiver of certain conditions contained in the Merger Agreement, Offeror
will be merged with and into the Company (the "Merger"), with the Company
continuing as the surviving corporation (the "Surviving Corporation").
Following consummation of the Merger, the Surviving Corporation will be a
wholly-owned subsidiary of Parent. At the effective time of the Merger (the
"Effective Time"), Shares outstanding immediately prior to the Effective
Time (other than Shares held by holders who perfect their appraisal rights
in accordance with the Nevada Revised Statutes) will, by virtue of the
Merger, be cancelled and terminated, and shall represent solely the right
to receive the Common Share Offer Price or the Preferred Share Offer Price
as set forth in the Merger Agreement and described in the Offer to
Purchase.
4. The Board of Directors of the Company (the "Board") has approved
the Offer, the Merger and the Merger Agreement, has declared the
advisability of the Merger Agreement, and has determined that the Offer and
the Merger are fair to, and in the best interests of, the stockholders of
the Company, and recommends that stockholders accept the Offer and tender
their Shares pursuant thereto.
5. The Offer is being made for all outstanding Common Shares and
Preferred Shares.
6. The Offer is conditioned upon, among other things, the Offeror
purchasing at least a majority of the outstanding Common Shares determined
on a fully diluted basis (excluding for this purpose Common Shares issuable
upon conversion of the Preferred Shares) and at least a majority of the
outstanding Preferred Shares determined on a fully diluted basis (the
"Minimum Condition"). The Offer is also conditioned upon the satisfaction
of certain other terms and conditions. See Section 14 -- "Certain
Conditions of Our Obligations" in the Offer to Purchase.
7. Tendering stockholders will not be obligated to pay brokerage fees
or commissions or, except as set forth in Instruction 7 of the Letter of
Transmittal, transfer taxes on the purchase of Common Shares pursuant to
the Offer.
The Offer is made solely by the Offer to Purchase and the related Letter of
Transmittal (and any amendments or supplements thereto) and is being made to all
holders of all Common Shares and Preferred Shares. The Offeror is not aware of
any state where the making of the Offer is prohibited by administrative or
judicial action pursuant to any valid state statute. If the Offeror becomes
aware of any valid state statute
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prohibiting the making of the Offer, the Offeror will make a good faith effort
to comply with such statute. If, after such good faith effort, the Offeror
cannot comply with such state statute, the Offer will not be made to, nor will
tenders be accepted from or on behalf of, the holders of Shares in any such
state. In any jurisdiction where the securities, "blue sky" or other laws
require the Offer to be made by a licensed broker or dealer, the Offer shall be
deemed to be made on behalf of the Offeror by one or more registered brokers or
dealers that are licensed under the laws of such jurisdiction.
If you wish to have us tender any or all of your Common Shares, please so
instruct us by completing, executing and returning to us the instruction form
contained in this letter. An envelope in which to return your instructions to us
is enclosed. If you authorize the tender of your Common Shares, all such Common
Shares will be tendered unless otherwise specified on the instruction form
contained in this letter. YOUR INSTRUCTIONS SHOULD BE FORWARDED TO US IN AMPLE
TIME TO PERMIT US TO SUBMIT A TENDER ON YOUR BEHALF PRIOR TO THE EXPIRATION OF
THE OFFER.
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INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
TEXOIL, INC.
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase, dated January 24, 2001 (the "Offer to Purchase"), and the
related Letter of Transmittal (which, as each may be amended from time to time,
together constitute the "Offer"), in connection with the offer by OEI
Acquisition Corp., a Nevada corporation (the "Offeror"), to purchase all the
outstanding shares of common stock, par value $.01 per share (the "Common
Shares"), of Texoil, Inc. (the "Company") at a purchase price of $8.25 per
Common Share, net to the seller, in cash, without interest, upon the terms and
subject to the conditions set forth in the Offer. (Pursuant to the Offer, the
Offeror is also offering to purchase all the outstanding shares of Series A
Convertible Preferred Stock, par value $.01 per share, of the Company. No
instructions are being given by this letter with respect to shares of Preferred
Stock of the Company.)
This will instruct you to tender to the Offeror the number of Common Shares
indicated below (or, if no number is indicated below, all Common Shares) held by
you for the account of the undersigned, upon the terms and subject to the
conditions set forth in the Offer.
Number of Common Shares to be Tendered:
--------------- Common Shares*
SIGN HERE
Account Number: Signature(s):
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Dated:
------------------------------------ , 2001
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Please type or print name(s)
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Please type or print address(es) here
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Area Code and Telephone Number
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Taxpayer Identification or Social Security Number(s)
* Unless otherwise indicated, it will be assumed that all Common Shares held by
us for your account are to be tendered.
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