Santa Maria Energy will merge with a New York-based acquisition corporation just as the northern Santa Barbara County energy company prepares to launch its long-awaited oil development project.
Hyde Park Acquisition Corp. II on Wednesday announced that the two companies had signed an agreement and plan to merge, which would combine all assets under Santa Maria Energy Corporation — the resulting parent company of the merger.
All Hyde Park and Santa Maria Energy stockholders will receive stock in the newly formed corporation, including affiliates of oil company financier Kayne Anderson Capital Advisors LP.
Santa Maria Energy officials will retain day-to-day management of the oil company’s operations, which include extracting oil from 75 wells drilled into Monterey shale and 26 wells drilled into a diatomite layer at its Orcutt Field.
The company’s latest oil development project, which was recently green-lighted by the Santa Barbara County Board of Supervisors but with stricter carbon-gas emissions standards, will install a total of 136 production oil wells, connecting pipelines and other oil equipment installed on leased property south of Orcutt.
The shares issued in the merger were set to be listed on the NASDAQ Capital Market.
Cash contributed by Hyde Park in the transaction, along with equity capital expected to be raised in conjunction with the merger, will be available for the development of Santa Maria Energy’s assets and for general corporate purposes.
The merger transaction is anticipated to close in the second quarter of 2014.
Santa Maria Energy officials, who recently decided against filing a lawsuit over the conditioned project approval, provided few other details Thursday since the merger is still pending.
"We believe completion of this merger and access to the public equity markets will enable Santa Maria Energy to execute on its developments plans, and in particular, its project in the Orcutt field that was recently approved by the Board of Supervisors," said Bob Poole, Santa Maria Energy's public and government affairs manager.
Poole previously told Noozhawk that the oil development project would take shape over the next two years.
On Wednesday, Hyde Park’s board of directors called the merger announcement a decision made in the best interest of all shareholders of the special purpose acquisition corporation.
“The board believes the oil resources owned by SME together with its track record as an operator engaged in the development and production of oil and natural gas in Northern Santa Barbara County provide Hyde Park shareholders with an investment opportunity with considerable upside potential,” according to a prepared company statement.
Hyde Park, which was incorporated in Delaware in 2011, entered into the deal with the understanding that the oil company would be increasing its diatomite production from its Orcutt field, installing greater steam generation capacity and building pipelines to transport water to the project site to be used during the cyclic-steam extraction process.