Cross Timbers, Lehman Brothers buy Spring Holding Co.

Petroleum News Alaska Staff

Cross Timbers Oil Co. and Lehman Brothers Holdings Inc. completed acquisition July 1 of the common stock of Spring Holding Co., a Tulsa, Okla.-based private oil and gas company, for cash and Cross Timbers’ common stock totaling $85 million.

At closing, Spring’s debt totaled $148 million.

Cross Timbers and Lehman Brothers each own 50 percent of a limited liability company that acquired the common stock of Spring and have equal board representation and control of the limited liability company and Spring.

Cross Timbers issued 4 million shares of its common stock at an agreed value of $11.42 per share and received $3.2 million in cash. Lehman Brothers contributed $42.5 million in cash and will give Cross Timbers an opportunity to acquire 50-percent equity interest at a later date.

Spring estimates proved reserves on Dec. 31, 1998, to be 264 billion cubic feet of gas equivalent, of which 99 percent is natural gas. Spring, through its subsidiary Spring Resources Inc., owns interests in about 1,400 producing wells on 340,000 net acres located primarily in the Arkoma Basin of Arkansas and Oklahoma.

Cross Timbers ascribes $20 million in value to non-producing assets including Mega Natural Gas Co. LLS, a gas-gathering and marketing company, other compression and gathering assets, undeveloped acreage and other assets.

For more information, contact Louis G. Baldwin at 817 870-2800.