Filed by Black Hills Corporation
Pursuant to Rule 425 under the
Securities Act of 1933
and deemed filed pursuant to Rule 14a-12
of the Securities Exchange Act of 1934
Subject Company: Black Hills Corporation
Commission File No.: 333-101576
The following press release was made by Black Hills Corporation:
FOR IMMEDIATE RELEASE
Contact: Mark T. Thies Peter H. Blum
Sr. Vice President and CFO Executive Vice President
Black Hills Corporation Mallon Resources Corporation
(605) 721-2331 (303) 293-2333
BLACK HILLS CORPORATION AND MALLON RESOURCES
ANNOUNCE S-4 FILING TO MERGE
RAPID CITY, SD--December 2, 2002--Black Hills Corporation (NYSE: BKH) and
Mallon Resources Corporation (OTCBB: MLRC) announced today that a Form S-4
Registration Statement was filed with the Securities and Exchange Commission on
November 29, 2002, in accordance with their plan to merge.
Through the merger, Black Hills Acquisition Corp., a wholly-owned
subsidiary of Black Hills Corporation, will merge with and into Mallon. Upon
consummation of the merger, Mallon will be the surviving company and a
wholly-owned subsidiary of Black Hills Corporation. A Merger Agreement was
approved by both companies' Boards of Directors, under which Mallon shareholders
will receive 0.044 of a share of Black Hills for each share of Mallon.
Completion of the merger, which is subject to customary conditions, including
approval by the shareholders of Mallon, is expected in the first quarter of
2003. The total cost of the transaction is estimated at $52 million, which
includes the $30.5 million acquisition in October 2002 by Black Hills of
Mallon's debt to Aquila Energy Capital Corporation, along with the settlement of
certain outstanding natural gas price hedges.
Black Hills Corporation (www.blackhillscorp.com) is a diverse energy and
communications company. Oil and gas operations, conducted in nine states with a
concentration of resources in the Rocky Mountain region, are part of the Black
Hills
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Energy, the integrated energy business unit which generates electricity,
produces natural gas, oil and coal and markets energy. Other business units of
Black Hills Corporation include Black Hills Power, an electric utility serving
western South Dakota, northeastern Wyoming and southeastern Montana; and Black
Hills FiberCom, a broadband communications company offering bundled telephone,
high speed Internet and cable entertainment services exclusively in western
South Dakota. Mallon Resources Corporation is a Denver, Colorado, based oil and
gas exploration and production company operating primarily in the San Juan Basin
of New Mexico.
INVESTOR NOTICES
Investors and security holders are advised to read the joint proxy
statement/prospectus in the Registration Statement on Form S-4 filed with the
SEC in connection with the proposed merger.
Investors and security holders may obtain a free copy of the joint proxy
statement/prospectus and other documents filed by Black Hills and Mallon with
the SEC at the SEC's web site at www.sec.gov. The joint proxy
statement/prospectus and such other documents (relating to Black Hills) may also
be obtained for free from Black Hills by directing such request to: Black Hills
Corporation, P.O. Box 1400, 625 Ninth Street, Rapid City, South Dakota 57709,
Attention: Steven J. Helmers, General Counsel; telephone: 605-721-2300; email:
shelmers@bh-corp.com. The joint proxy statement/prospectus and such other
documents (relating to Mallon) may also be obtained for free from Mallon by
directing such request to: Mallon Resources Corporation, 999 18th Street, Suite
1700, Denver, Colorado 80202, Attn: Peter H. Blum, Executive Vice President;
telephone: 303-293-2333.
Mallon, its directors, executive officers and certain members of management
and employees may be considered "participants in the solicitation" of proxies
from Mallon's shareholders in connection with the merger. Information regarding
such persons and a description of their interests in the merger and related
transactions are contained in the Registration Statement on Form S-4.
CAUTION REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements in this release include "forward-looking statements"
as defined by the Securities and Exchange Commission, or SEC. Black Hills
Corporation makes these forward-looking statements in reliance on the safe
harbor protections provided under the Private Securities Litigation Reform Act
of 1995. All statements, other than statements of historical facts, included in
this release that address activities, events or developments that Black Hills
expects, believes or anticipates will or may occur in the future are
forward-looking statements. These forward-looking statements are based on
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assumptions, which Black Hills believes are reasonable based on current
expectations and projections about future events and industry conditions and
trends affecting Black Hills' business. However, whether actual results and
developments will conform to Black Hills' expectations and predictions is
subject to a number of risks and uncertainties that could cause actual results
to differ materially from those contained in the forward-looking statements,
including, among other things: (1) unanticipated developments in the western
power markets, including unanticipated governmental intervention, deterioration
in the financial condition of counterparties, default on amounts due from
counterparties, adverse changes in current or future litigation, adverse changes
in the tariffs of the California Independent System Operator, market disruption
and adverse changes in energy and commodity supply, volume and pricing and
interest rates; (2) prevailing governmental policies and regulatory actions with
respect to allowed rates of return, industry and rate structure, acquisition and
disposal of assets and facilities, operation and construction of plant
facilities, recovery of purchased power and other capital investments, and
present or prospective wholesale and retail competition; (3) the State of
California's efforts to reform its long-term power purchase contracts; (4)
impact of environmental and safety laws; (5) weather conditions; (6)
competition; (7) pricing and transportation of commodities; (8) market demand,
including structural market changes; (9) unanticipated changes in operating
expenses or capital expenditures; (10) capital market conditions; (11) legal and
administrative proceedings that influence Black Hills' business and
profitability; (12) the effects on Black Hills' business of terrorist actions or
responses to such actions; (13) the effects on Black Hills' business resulting
from the financial difficulties of Enron and other energy companies, including
their effects on liquidity in the trading and power industry, and Black Hills'
ability to access the capital markets on the same favorable terms as in the
past; (14) the effects on Black Hills' business in connection with a lowering of
Black Hills' credit rating (or actions Black Hills may take in response to
changing credit ratings criteria), including, increased collateral requirements
to execute Black Hills' business plan, demands for increased collateral by Black
Hills' current counter-parties, refusal by Black Hills' current or potential
counterparties or customers to enter into transactions with Black Hills and
Black Hills' inability to obtain credit or capital in amounts or on terms
favorable to Black Hills; and (15) other factors discussed from time to time in
Black Hills' filings with the SEC.
This information contains forward-looking statements and forecasts, the
realization of which cannot be assured by Mallon Resources Corporation. Actual
results may differ significantly from those forecast. Inaccurate geologic and
engineering interpretations, the volatility of commodity prices, unbudgeted cost
increases, unforeseen delays in operations, and operations that prove less
successful than anticipated are risks that can significantly affect Mallon's
operations. These and other risk factors that affect Mallon's business are
discussed in Mallon's Annual Report on Form 10-K.
End of Release
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