30-04-08 Stone Energy and Bois d'Arc Energy have entered into a definitive merger agreement pursuant to which Stone will acquire Bois d'Arc.
Under the terms of the merger agreement, Bois d'Arc stockholders will receive $ 13.65 in cash and 0.165 shares of Stone common stock for each share of Bois d'Arc common stock. The transaction has an aggregate value of approximately $ 1.8 bn.

The combination of these two companies will result in one of the largest Gulf of Mexico-focused operating companies, with a solid production base, a strong portfolio for continued development of proved and probable reserves, and an extensive inventory of exploration opportunities.
"Bois d'Arc is an outstanding fit with Stone given the complementary asset bases, strategies and skill sets of the two companies," said David Welch, Chief Executive Officer of Stone. "Stone is a strong exploitation and development company and combined with Bois d'Arc's outstanding inventory of shelf exploration prospects, the combined company will be a leading Gulf of Mexico producer. The transaction will be accretive to Stone on a 2008 cash flow basis and the combined entity is expected to generate significant free cash flow which will continue to strengthen its balance sheet."

Following the merger, Stone expects to produce over 300 mm cf per day and have over 700 bn cf of estimated proved reserves and approximately 275 bn cf of estimated probable reserves, with a multi-year exploration prospect inventory, extensive 3D seismic coverage over the Gulf of Mexico, and a material leasehold position of over 800,000 net undeveloped acres.
Gary Blackie, Chief Executive Officer of Bois d'Arc, stated, "Stone has the cash flow as well as the depth of personnel and the infrastructure in place to effectively capture the full value of Bois d'Arc's extensive prospect inventory. The case for combining the two companies is extremely compelling to the Bois d'Arc stockholders."

Stone expects to fund the transaction utilizing existing cash on its balance sheet, borrowings from a proposed new $ 700 mm credit facility underwritten by Bank of America, and the issuance of approximately 11.3 mm shares of Stone common stock.
The transaction is expected to close in the third quarter of 2008. Following the closing, Stone will remain headquartered in Lafayette, Louisiana, and David Welch will continue as Chief Executive Officer of the combined company.

The Boards of Directors of both companies have approved the merger agreement, and each will recommend the transaction to its respective stockholders for approval. Completion of the transaction is subject to stockholder approval of Stone and Bois d'Arc, regulatory approvals, and other customary conditions.
Post closing, it is anticipated that the Stone stockholders will own approximately 72 % of the combined company, and the Bois d'Arc stockholders will own approximately 28 % of the combined company.

Concurrent with the execution of the merger agreement, Comstock Resources, which holds approximately 49 % ofthe outstanding shares of Bois d'Arc, entered into a stockholder agreement in which it agreed to vote in favour of the merger and agreed to a one-year lock-up.
In addition, Gary Blackie (a director and the Chief Executive Officer of Bois d'Arc) and Wayne Laufer (a director and the former Chief Executive Officer of Bois d'Arc), who own approximately 8 % and 10 %, respectively, of the outstanding shares of Bois d'Arc common stock, also entered into stockholder agreements in which they agreed to vote in favour of the merger.