• Stone Energy Corp., Lafayette, La., and Basin Exploration Inc., Denver, have agreed to merge in a tax-free, stock-for-stock deal valued at $410 million. (For more on this deal, see the article "Making a Bigger Splash," in this issue.) • Petsec Energy Inc., Lafayette, La., has sold or signed agreements to sell a majority of its leases, all in the Gulf of Mexico. Petsec sold its 33% interest in Mustang Island 883 and 100% interest in Mustang Island leases 748, 749, 795, 797, 940 and 941 to LLOG Offshore Exploration Inc. for $6.4 million. The sale has been approved by the bankruptcy court presiding over PEI's Chapter 11 bankruptcy. Apache Corp., Houston, plans to acquire Petsec's 50% working interest in Main Pass leases 5, 6, 7, 84, 90, 91, 93, 104 and 105, Grand Isle 45, Ship Shoal leases 192, 193 and 194, South Marsh Island 7, and West Cameron leases 237, 543, 544 and 653 for $51.2 million. Apache is the operator of the leases. ATP Oil and Gas, Houston, plans to acquire Petsec's interests in the West Cameron 461 lease and South Marsh Island 189 and 190 leases for $1.6 million and $3.1 million, respectively. Stone Energy Corp., Lafayette, plans to acquire the South Pelto 22 lease and Vermilion Block 258 leases for $800,000 and $1.7 million, respectively. There are six additional exploration leases and other miscellaneous assets that PEI plans to sell, as well. • Aquila Energy Capital Corp. has purchased $5 million of 8% Series B senior convertible cumulative preferred stock of Contango Oil & Gas Co., Houston. The shares are convertible at $2.20 each, or 2.3 million common shares, representing approximately 7% of the company's diluted shares. • Bellwether Exploration Co., Houston, has sold noncore oil and gas assets for $22 million and anticipates selling additional assets containing 3- to 5 million BOE of reserves by the end of January, to further reduce debt. The divested assets contained 3 million BOE of reserves. More than 50% of the divested assets were overriding royalty interests from the Robinson's Bend and Blue Creek fields in Tuscaloosa County, Ala. This portion of the divestiture included 560 wells producing a net 450 BOE per day. The sale reduces Bellwether's total well count 25% and production by 1,400 BOE per day, or less than 10%.