e425
Filed
by Petrohawk Energy Corporation
(Commission File No. 000-25717)
Pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to
Rule 14a-12 of the Securities Exchange Act of 1934
Subject Company:
Mission Resources Corporation
(Commission File No. 000-09498)
The following information is a summary of the calculation of the estimated consideration to be paid
by Petrohawk Energy Corporation (“Petrohawk”) to holders of common stock of Mission Resources
Corporation (“Mission”) upon consummation of the merger of Mission with Petrohawk Acquisition
Corporation, a wholly owned subsidiary of Petrohawk. You are urged to carefully read the joint
proxy statement/prospectus relating to the merger, which is accessible over the Internet from the
SEC’s website at www.sec.gov or the websites of Petrohawk Energy Corporation, at www.petrohawk.com,
and Mission Resources Corporation, at www.mrcorp.com.
CALCULATION OF MERGER CONSIDERATION
ACQUISITION OF MISSION RESOURCES CORPORATION BY
PETROHAWK ENERGY CORPORATION
At the effective time of the merger of Mission Resources Corporation with Petrohawk Acquisition
Corporation, a wholly owned subsidiary of Petrohawk Energy Corporation, each share of Mission
common stock outstanding immediately prior to the effective time will be converted into the right
to receive either a number of shares of Petrohawk common stock or an amount of cash, in each case
as described more fully in the joint proxy statement/prospectus. The actual per share stock
consideration and per share cash consideration to be paid to Mission stockholders cannot be
determined until the effective time of the merger because of the dependence of these final
calculations on the closing prices and volumes of Petrohawk common stock for ten trading days
ending three calendar days immediately prior to the effective time (or, if such calendar day is not
a trading day, ending on the trading day immediately preceding such calendar day). The calculation
set forth below is intended to provide you with information as to the amount of such consideration
as though the effective date of the merger were Thursday, July 28, 2005, using the stock’s closing
price and volumes reported for ten trading days ended three calendar days prior to Thursday, July
28, 2005. The calculation set forth below will change if the effective date of the merger is not
Thursday, July 28, 2005.
Definitions
The following definitions are used for purposes of this discussion and the following table:
| |
• |
|
The “aggregate consideration” is the dollar amount of the sum of: |
| |
• |
|
the product of (1) the aggregate number of shares of Petrohawk common stock that
Petrohawk will issue pursuant to the merger (which is the product of 0.7718 and 60%
of the “total common stock amount”) and (2) the “Average Petrohawk Common Stock
Value” (referred to in the merger agreement as the “Final Parent Stock Price”), and |
| |
| |
• |
|
the aggregate amount of cash Petrohawk will pay pursuant to the merger (which is
the product of (1) 40% of the total common stock amount and (2) $8.15). We refer to
this aggregate amount of cash as the “total cash amount.” |
| |
• |
|
The “Average Petrohawk Common Stock Value” is the volume-weighted average of the closing
prices per share of Petrohawk common stock as reported on the Nasdaq National Market during
the ten consecutive trading day period during which shares of Petrohawk common stock are
traded on the Nasdaq National Market ending on the third calendar day immediately prior to
the effective time of the merger (or, if such calendar day is not a trading day, ending on
the trading day immediately preceding such calendar day). We refer to the ten consecutive
trading day period as the “valuation period.” |
| |
| |
• |
|
The “total common stock amount” is the total number of shares of Mission common stock
outstanding immediately prior to the effective time of the merger; provided that, for
purposes of determining the aggregate consideration, the total common stock amount will not
exceed the sum of 41,535,088 (the number of shares of Mission common stock outstanding on
April 1, 2005) and 5,832,715 (the number of shares of Mission common stock permitted to be
issued by Mission prior to the merger pursuant to existing stock options under the terms of
the merger agreement). |
Calculation Rationale
Subject to the allocation procedures described in the joint proxy statement/prospectus, the
consideration to be paid for each share of Mission common stock in respect of which a stock
election is made will be the number of shares of Petrohawk common stock equal to the “exchange
ratio,” which is the number obtained by dividing the per share consideration by the Average
Petrohawk Common Stock Value.
The formula described above is designed to substantially equalize the value of the consideration to
be received for each share of Mission common stock in the merger at the time the calculation is
made, regardless of whether a Mission stockholder elects to receive cash, Petrohawk common stock,
or a combination of cash and Petrohawk common stock. This equalization mechanism was deemed to be
desirable because the
2
value of the Petrohawk common stock will fluctuate. The value of the merger consideration to be
received with respect to each share of Mission common stock will be equal to $3.26 plus
approximately $0.4631 per $1.00 of Average Petrohawk Common Stock Value.
To ensure that the value of the consideration for each share of Mission common stock is as equal as
possible upon receipt by Mission stockholders, regardless of the form of the consideration, the
equalization mechanism is to be applied based on the Average Petrohawk Common Stock Value. The
formula is also designed to fix the total number of shares of Petrohawk common stock and the amount
of cash to be issued and paid, respectively, in the merger (in each case subject to upward
adjustment, up to approximately 1.8 million shares of common stock and $12.7 million in cash, in
the event that any shares of Mission common stock are issued in accordance with the merger
agreement pursuant to the exercise of Mission stock options or otherwise). Because the amount of
cash and the number of shares of Petrohawk common stock to be paid and issued, respectively, in the
merger are fixed at approximately $135.4 million and 19.234 million shares, respectively, the
percentage of shares of Mission common stock that will be exchanged for Petrohawk common stock and
the percentage that will be exchanged for cash will depend upon the Average Petrohawk Common Stock
Value.
The greater the Average Petrohawk Common Stock Value, the greater the percentage of shares of
Mission common stock that will be exchanged for shares of Petrohawk common stock (and the lesser
the percentage of shares of Mission common stock that will be exchanged for cash) and the lesser
the Average Petrohawk Common Stock Value, the greater the percentage of shares of Mission common
stock that will be exchanged for cash (and the lesser the percentage of shares of Mission common
stock that will be exchanged for Petrohawk common stock).
Hypothetical Value of Stock and Cash Consideration
The following table sets forth a hypothetical Average Petrohawk Common Stock Value based upon the
closing prices and trading volumes of Petrohawk common stock on the Nasdaq National Market during
the ten consecutive trading days ending on the third calendar day prior to Thursday, July 28, 2005.
The table will only be updated if the effective time of the merger does not occur on Thursday,
July 28, 2005.
The actual value of the cash consideration or number of shares of Petrohawk common stock that you
will receive for each share of Mission common stock you hold will differ from the amount shown in
this example only if the effective time of the merger does not occur on Thursday, July 28, 2005.
* Updated through close of trading on July 26, 2005
3
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Per Share |
|
Percentage of Outstanding |
| Stock |
|
Shares of Mission Common |
| Consideration |
|
Stock to Receive: |
| Average |
|
|
|
(Shares of |
|
|
|
|
|
|
|
|
| Petrohawk |
|
|
|
Petrohawk |
|
Value of Per |
|
Per Share |
|
|
|
|
| Common |
|
Transaction |
|
Common |
|
Share Stock |
|
Cash |
|
Stock |
|
Cash |
| StockValue |
|
Value |
|
Stock) |
|
Consideration |
|
Consideration |
|
Consideration |
|
Consideration |
|
|
|
|
|
|
|
|
|
|
|
|
|
$10.83 |
|
$352,843,161 |
|
0.7641 |
|
$8.2753 |
|
$8.2752 |
|
60.61% |
|
39.39% |
No assurance can be given that the Average Petrohawk Common Stock Value will be equivalent to
the fair market value of Petrohawk common stock on the effective time of the merger, the date that
the merger consideration is received by a Mission stockholder or at any other time. The actual
fair market value of the Petrohawk common stock received by Mission stockholders depends upon the
fair market value of Petrohawk common stock upon receipt, which may be higher or lower than the
Average Petrohawk Common Stock Value or the market price of Petrohawk common stock calculated as of
today.
No fractional shares of Petrohawk common stock will be issued to any holder of Mission common stock
in connection with the merger. For each fractional share that would otherwise be issued, Petrohawk
will pay cash in an amount equal to the fraction multiplied by the average of the closing sale
prices of Petrohawk common stock on the Nasdaq National Market for the five trading days
immediately preceding the date on which the merger occurs. No interest will be paid or accrued on
cash payable in lieu of fractional shares of Petrohawk common stock.
The table is based on the assumption that the number of exchangeable shares is 42,638,520 (the
number of shares of Mission common stock outstanding on July 25, 2005). To the extent that the
number of shares of Mission common stock outstanding increases in accordance with the merger
agreement (whether as a result of the exercise of Mission options or otherwise), the number of
exchangeable shares will increase and the aggregate transaction value will increase, but there will
be no change in the per share stock consideration or per share cash consideration. Each additional
exchangeable share of Mission common stock will increase the aggregate transaction value by 0.4631
shares of Petrohawk common stock and $3.26 in cash.
4