Calpine to acquire Sheridan Energy

Aug 26, 1999 02:00 AM

Calpine Corporation, a leading U.S. power company, announced it has entered into an agreement with Houston, Texas-based Sheridan, a natural gas exploration and production company, to acquire Sheridan through a $ 41 mm cash tender offer.
Calpine will offer to purchase all outstanding shares of Sheridan's common stock for $ 5.50 per share. Subject to customary conditions, the companies expect to complete the tender offer in September 1999.
Sheridan's oil and gas properties are located in northern California and the Gulf Coast region, including 148 bn cf equivalent of proven reserves, of which 90 % are natural gas.
These reserves are located in strategic markets where Calpine is developing low-cost natural gas supplies and proprietary pipeline systems in support of its highly efficient, natural gas-fired power plants. These fully integrated regional systems will provide Calpine with the flexibility to respond quickly and cost effectively to changing market conditions.

In January 1999, Calpine acquired a 20 % interest in Sheridan's northern California properties through an investment in Sheridan California Energy, Inc., an affiliate of Sheridan.
"Sheridan is a strategic addition to Calpine's fuel capabilities and brings to Calpine a wealth of expertise in every facet of gas exploration and development," said Tom Mason, Calpine executive vice president. "In addition, Sheridan's portfolio of proven gas reserves will further strengthen our "wellhead-to-burner tip" fuel program, giving Calpine a stronger competitive advantage as energy markets across the country deregulate."
The Boards of Directors of Calpine and Sheridan have approved the transaction. In addition, certain Sheridan shareholders have agreed to tender their shares, representing an aggregate of approximately 51 % of the outstanding shares, to Calpine.

Calpine Corporation is national power company dedicated to providing customers with reliable and competitively priced electricity and thermal energy. Calpine currently has approximately 8,500 MW of capacity in operation, under construction or in announced development in 12 states -- enough energy to power 8,5 mm households.

Source: Business Wire via Newspage
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