Just two weeks after Santa Maria Energy’s proposal for 136 cyclic-steam-injection oil wells was controversially approved by the Board of Supervisors, the company made plans to merge with Hyde Park Acquisition Corp. II, a New York–based firm, according to a form dated November 27 and filed with the federal Securities and Exchange Commission (SEC). The merger will result in the formation of a parent company called Santa Maria Energy Corporation, in which each company’s owners — as well as Santa Maria Energy shareholders from Kayne Anderson Capitol Advisors, LP, a private equity firm that manages $24 billion in assets — will receive stock. The shares issued in the merger will be listed on the NASDAQ Capital Market. According to NASDAQ, Hyde Park has more than $79 million in assets, and, according to the SEC document, Hyde Park will contribute at least $40 million in a trust account for the new parent company.
The company’s headquarters will remain in Santa Maria, company representatives
said, and its existing management will remain in charge of daily operations. The company said it couldn’t comment any further on the merger, pending additional documents to be filed with the SEC. “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,” Santa Maria Energy officials said in a prepared statement.
“The board [of directors of Hyde Park] 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,” Hyde Park said in its statement.
The supervisors approved the oil wells on November 12, after an impassioned six-hour hearing. Although the vote allowed the project to move forward, it imposed a stricter limit on its greenhouse-gas emissions, forcing the company to pay an average of $500,000 a year for mitigations. It is expected to take a couple of years for all 136 wells to be up and running. The merger is expected to be finalized early next year.