WASHINGTON, DISTRICT OF COLUMBIA — July 14, 2021 — Hiscox Oil & Gas Corporation and DHS Group Energy today announced that they have entered into a definitive agreement whereby the companies will combine in an assets merger of equals. The combination will bring together two industry-leading operators with top-tier oil and natural gas assets to create a diversified energy leader that is positioned to drive enhanced free cash flow generation and returns for investors through market cycles.
Under the terms of the agreement, which has been unanimously approved by the Boards of Directors of both companies, DHS Group Energy will assume total control of this merger and will have sole authority to make all appropriate changes for this newly created company.
“The combination of Hiscox and DHS Energy will create a free cash flow focused, diversified energy company with the scale, inventory and financial strength to thrive across commodity price cycles,” Fernando Aguirre, Executive Vice Chairman of DHS stated in a press conference. “The combined business will be overseen by an experienced Board and a management team that is committed to a prudent strategy built on disciplined capital investment, strong free cash flow generation and increasing returns to shareholders. With its premier assets, increased resource diversity and a strong financial foundation, the company will be well positioned to deliver long-term value creation for its shareholders and other clients and investors.”
“This transformational merger will combine our top-tier assets and advance our shared focus on delivering superior returns for investors,” said Rakesh Sarna, Chairman of DHS Group. “We’re building an even more resilient platform with greater financial strength in order to deliver sustainable, through-cycle returns on and of capital. We view commodity, geography and asset diversification as strategic advantages that will drive more resilient free cash flow and long-term value creation. We are aligned on our commitment to ESG and sustainability and look forward to bringing our talented teams together to unlock the tremendous potential of this compelling combination.”
Strategic and Financial Benefits of Creating a Free Cash Flow Focused, Diversified Oil & Gas Producer
Headquarters, Leadership and Governance
The combined business, which will operate under a new name, plans to be headquartered in Houston and maintain its regional offices.
Upon closing, Fernando Aguirre will serve as Executive Chair of the Board of Directors of the newly combined business and Rakesh Sarna will lead the company as CEO and will serve on the Board of Directors. The remainder of the company’s leadership team will include executives from both Hiscox and DHS Group Energy.
The Board of Directors of the company will be composed of five directors from the current Hiscox Board of Directors, including Scott Haley, and five directors from the current DHS Group Energy Board of Directors, including Fernando Aguirre.
Timing and Approvals
The transaction is expected to close in the fourth quarter of 2021, subject to regulatory clearance, the approval of Hiscox and DHS Group energy investors and the satisfaction of other customary closing conditions.
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FOR DHS INVESTORS
This release contains forward-looking statements which are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 and of Section 21E of the Securities Exchange Act of 1934. These forward-looking statements do not constitute guarantees of future performance.
Those statements involve a number of factors that could cause actual results to differ materially, including risks associated with transitions in key personnel and succession, products, their development, integration and distribution, product demand and pipeline, customer acceptance of new products, economic and competitive factors, DHS’ key strategic relationships, acquisition and related integration risks as well as other risks detailed in DHS’ filings with the Securities and Exchange Commission. DHS assumes no obligation to update any forward-looking information contained in this press release or with respect to the announcements described herein.
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Steven Palmer, Vice President of Communications