-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, AV0Z3hq4ntP1iEQFt9RVdu7e+qP4gpxQeO4SVRmVw+JbVGst8TPyqamfVz+GCh4I ozbP3BZdZf8844OGfyAb0w== 0001062379-04-000039.txt : 20040525 0001062379-04-000039.hdr.sgml : 20040525 20040525115920 ACCESSION NUMBER: 0001062379-04-000039 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20040525 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: HOUSTON EXPLORATION CO CENTRAL INDEX KEY: 0001015293 STANDARD INDUSTRIAL CLASSIFICATION: OIL AND GAS FIELD EXPLORATION SERVICES [1382] IRS NUMBER: 222674487 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-48519 FILM NUMBER: 04829099 BUSINESS ADDRESS: STREET 1: 1100 LOUISIANA STREET STREET 2: SUITE 2000 CITY: HOUSTON STATE: TX ZIP: 77002-5219 BUSINESS PHONE: 713-830-6800 MAIL ADDRESS: STREET 1: 1100 LOUISIANA STREET STREET 2: SUITE 2000 CITY: HOUSTON STATE: TX ZIP: 77002-5219 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: KEYSPAN CORP CENTRAL INDEX KEY: 0001062379 STANDARD INDUSTRIAL CLASSIFICATION: NATURAL GAS DISTRIBUTION [4924] IRS NUMBER: 113431358 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 175 EAST OLD COUNTRY ROAD CITY: HICKSVILLE STATE: NY ZIP: 11801 BUSINESS PHONE: 5167556650 MAIL ADDRESS: STREET 1: ONE METROTECH CENTER CITY: BROOKLYN STATE: NY ZIP: 11201 FORMER COMPANY: FORMER CONFORMED NAME: MARKETSPAN CORP DATE OF NAME CHANGE: 19980526 SC 13D/A 1 ks13d-may04.txt SCHEDULE 13D (AMENDMENT NO. 3) UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D (Rule 13d-101) Information to be Included in Statements Filed Pursuant to Rule 13d-1(a) and Amendments Thereto Filed Pursuant to Rule 13d-2(a) Under the Securities Exchange Act of 1934 (Amendment No. 3)* THE HOUSTON EXPLORATION COMPANY - -------------------------------------------------------------------------------- (Name of Issuer) Common Stock, par value $ .01 per share - -------------------------------------------------------------------------------- (Title of Class of Securities) 44212010 - -------------------------------------------------------------------------------- (CUSIP Number) John J. Bishar, Jr. - -------------------------------------------------------------------------------- Senior Vice President & General Counsel KeySpan Corporation One MetroTech Center Brooklyn, New York 11201 (718) 403-1000 With a copy to: William R. Dougherty Simpson Thacher & Bartlett LLP 425 Lexington Avenue New York, New York 10017 (212) 455-2000 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) May 24, 2004 - -------------------------------------------------------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of sections 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. |_| Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See section 240.13d-7 for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). Page 2 of 12 - ----------- -------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON KeySpan Corporation I.R.S. Identification No. 11-3431358 - ----------- -------------------------------------------------------------------- 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)[ ] (b)[ ] - ----------- -------------------------------------------------------------------- 3 SEC USE ONLY - ----------- -------------------------------------------------------------------- 4. SOURCES OF FUNDS* Not Applicable - ----------- -------------------------------------------------------------------- 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)[ ] - ----------- -------------------------------------------------------------------- 6. CITIZENSHIP OR PLACE OF ORGANIZATION New York - ----------------------- ---------- --------------------------------------------- NUMBER OF 7. SOLE VOTING POWER SHARES BENEFICIALLY 17,380,392 (indirectly through KeySpan Energy Corporation and THEC Holdings Corp.) OWNED BY ---------- --------------------------------------------- EACH 8. SHARED VOTING POWER REPORTING PERSON ---------- --------------------------------------------- WITH 9. SOLE DISPOSITIVE POWER 17,380,392 (indirectly through KeySpan Energy Corporation and THEC Holdings Corp.) ---------- --------------------------------------------- 10. SHARED DISPOSITIVE POWER - ----------- -------------------------------------------------------------------- 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 17,380,392 (indirectly through KeySpan Energy Corporation and THEC Holdings Corp.) - ----------- -------------------------------------------------------------------- 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - ----------- -------------------------------------------------------------------- 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 55% - ----------- -------------------------------------------------------------------- 14. TYPE OF REPORTING PERSON* HC - ----------- -------------------------------------------------------------------- Page 3 of 12 - ----------- -------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON KeySpan Energy Corporation I.R.S. Identification No. 11-3344628 - ----------- -------------------------------------------------------------------- 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)[ ] (b)[ ] - ----------- -------------------------------------------------------------------- 3 SEC USE ONLY - ----------- -------------------------------------------------------------------- 4. SOURCES OF FUNDS* Not Applicable - ----------- -------------------------------------------------------------------- 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)[ ] - ----------- -------------------------------------------------------------------- 6. CITIZENSHIP OR PLACE OF ORGANIZATION New York - ----------------------- ---------- --------------------------------------------- NUMBER OF SHARES 7. SOLE VOTING POWER BENEFICIALLY OWNED BY 17,380,392 (indirectly through THEC Holdings Corp.) EACH ---------- --------------------------------------------- REPORTING 8. SHARED VOTING POWER PERSON WITH ---------- --------------------------------------------- 9. SOLE DISPOSITIVE POWER 17,380,392 (indirectly through THEC Holdings Corp.) ---------- -------------------------------------------- 10. SHARED DISPOSITIVE POWER - ----------- -------------------------------------------------------------------- 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 17,380,392 (indirectly through THEC Holdings Corp.) - ----------- -------------------------------------------------------------------- 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - ----------- -------------------------------------------------------------------- 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 55% - ----------- -------------------------------------------------------------------- 14. TYPE OF REPORTING PERSON* CO - ----------- -------------------------------------------------------------------- Page 4 of 12 - ----------- -------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON THEC Holdings Corp. I.R.S. Identification No. 76-0489610 - ----------- -------------------------------------------------------------------- 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)[ ] (b)[ ] - ----------- -------------------------------------------------------------------- 3 SEC USE ONLY - ----------- -------------------------------------------------------------------- 4. SOURCES OF FUNDS* Not Applicable - ----------- -------------------------------------------------------------------- 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)[ ] - ----------- -------------------------------------------------------------------- 6. CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - ----------------------- ---------- --------------------------------------------- NUMBER OF SHARES 7. SOLE VOTING POWER BENEFICIALLY OWNED BY 17,380,392 EACH ---------- --------------------------------------------- REPORTING 8. SHARED VOTING POWER PERSON WITH ---------- --------------------------------------------- 9. SOLE DISPOSITIVE POWER 17,380,392 ---------- --------------------------------------------- 10. SHARED DISPOSITIVE POWER - -------------------------------------------------------------------------------- 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 17,380,392 - ----------- -------------------------------------------------------------------- 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - ----------- -------------------------------------------------------------------- 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 55% - ----------- -------------------------------------------------------------------- 14. TYPE OF REPORTING PERSON* CO - ----------- -------------------------------------------------------------------- Page 5 of 12 Item 1. Security and Issuer Item 1 is hereby amended and restated as follows: This Amendment No. 3 (the "Amendment") to Schedule 13D relating to the Common Stock, par value $0.01 per share (the "Common Stock"), of The Houston Exploration Company, a Delaware corporation (the "Issuer") is filed by KeySpan Corporation (f/k/a BL Holding Corp.), a New York corporation ("KeySpan"), KeySpan Energy Corporation, a New York corporation ("KEC"), and THEC Holdings Corp., a Delaware corporation ("THEC" and, together with KeySpan and KEC, "Reporting Persons"), to further amend the Schedule 13D that was previously filed on October 8, 1997 and amended by Amendment No. 1 thereto, filed on April 7, 2000 and Amendment No. 2 thereto, filed on March 3, 2003. Unless otherwise indicated, all capitalized terms used but not defined in this Amendment have the same meaning as set forth in the Schedule 13D as previously amended. The principal executive offices of the Issuer are located at 1100 Louisiana, Suite 2000, Houston, Texas 77002-5219. Item 2. Identity and Background Item 2 is hereby amended by adding the following text: Annexes A-1, A-2 and A-3 are hereby amended and restated as attached hereto. Item 4. Purpose of Transaction Item 4 is hereby amended and restated as follows: KeySpan, THEC and Issuer have announced that they plan to enter into to an agreement under which THEC will transfer to Issuer up to 10,800,000 shares of Common Stock in exchange for all of the stock of a wholly owned Issuer subsidiary, Seneca-Upshur Petroleum, Inc ("Seneca"). At the time of the exchange, Seneca will hold all of Issuer's Appalachian Basin assets and an amount of additional cash calculated to equalize the value of the Common Stock being exchanged. KeySpan and Issuer have ascribed a value of $60 million dollars to the Appalachian Basin producing assets. At December 31, 2003, these properties had proved reserves of 50.5 billion cubic feet of natural gas equivalent (Bcfe), or approximately 7% of Issuer's total proved reserves. The value that KeySpan will receive for its 10,800,000 shares of Common Stock in the proposed exchange will be determined by a formula, one of the components of which is the ultimate public offering price of the shares of Common Stock in the offering. Assuming a public offering price of $45.01 (which was the last reported sales price of Common Stock on the New York Stock Exchange on May 21, 2004), KeySpan will receive a per share value for its 10,800,000 shares of Common Stock that is equal to $40.09. The value per share received by KeySpan will increase or decrease, as the case may be, by approximately $0.51 per share for a corresponding $1.00 increase or decrease in the assumed public offering price. If the proposed exchange is consummated, KeySpan would own 6,580,392 shares, or approximately 24%, of Issuer's outstanding Common Stock. The Issuer may contribute a portion of the net proceeds from any exercise by the underwriters of their over-allotment option prior to the closing of the offering to Seneca and up to 310,000 additional shares of Common Stock may be redeemed from KeySpan in the proposed exchange (in which case KeySpan would own 6,270,392 shares, or approximately 23%, of Issuer's outstanding Common Stock). In addition, KeySpan would reduce its representation on Issuer's Board of Directors to two directors from five and the Chief Executive Officer of KeySpan will no longer serve as Chairman of the Board of Directors of the Issuer. In addition, KeySpan plans to enter into an underwriting agreement pursuant to which it would agree, among other things, not to transfer, without the prior written consent of the underwriters and subject to certain exceptions, any shares of Common Stock during the period ending 90 days after the date of the Page 6 of 12 prospectus supplement relating to the offering of shares of Common Stock. As part of the proposed transactions, THEC would also agree that, upon consummation of the proposed transactions, for a period of three years, THEC would agree not to increase its ownership interest in the Issuer above the ownership interest it has at the time of consummation. Since consummation of the proposed transactions is subject to each party's satisfaction with the public offering price, no assurance can be given that the proposed transactions will be completed. The preceding summary of the proposed transactions is not intended to be complete and is qualified in its entirety by reference to the full text of the press release issued by KeySpan, a copy of which is filed as Exhibit 8 hereto, and which is incorporated herein by reference. KeySpan, KEC and THEC intend to review the performance of their investment in the Issuer from time to time. Depending on various factors, including the business, prospects and financial position of the Issuer, the current and anticipated future price levels of the Common Stock, the conditions in the securities markets and general economic and industry conditions, as well as the benefits of diversification and the other investment opportunities available to them, KeySpan, KEC and THEC will take such actions with respect to their investment in the Issuer as they deem appropriate in light of the circumstances existing from time to time. Subject to the terms of any agreement entered into in connection with the proposed transactions, KeySpan, KEC and THEC may purchase additional equity in the Issuer or may dispose of some or all of their holdings in the open market, in public offerings, in private negotiated transactions or in other transactions, including derivative transactions. Other than as described above, none of KeySpan, KEC and THEC has any plans or proposals that relate to or would result in any of the actions described in subparagraphs (a) through (j) of Item 4 of Schedule 13D (although KeySpan, KEC and THEC reserve the right to develop such plans). Item 5. Interest in Securities of the Issuer Item 5 is hereby amended and restated as follows: (a) As of the date hereof, THEC beneficially owns, and KeySpan and KEC beneficially own indirectly through THEC, 17,380,392 shares of Common Stock, representing approximately 55% of the total outstanding shares of Common Stock (based on 31,854,155 shares of Common Stock outstanding as reported in the Issuer's Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 7, 2004). Upon consummation of the proposed transactions described in Item 4, THEC, and KeySpan and KEC indirectly through THEC, will own 6,580,392 shares, or approximately 24%, of Issuer's outstanding Common Stock (or in the case the underwriters exercise their over allotment option in full, 6,270,392 shares, or approximately 23%, of Issuer's outstanding Common Stock). (b) THEC has, and KeySpan and KEC each have indirectly through THEC, sole power to vote or direct the vote and to dispose or direct the disposition of shares of Common Stock owned by it. (c) Not applicable. (d) Not applicable. (e) Not applicable. Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer Item 6 is hereby amended and restated as follows: Page 7 of 12 Upon consummation of the proposed transactions described in Item 4, Robert B. Catell, the Chief Executive Officer of KeySpan and KEC, who also serves as director to KeySpan and KEC, and Stephen W. McKessey, who also serves as a director of KeySpan, will serve as directors of Issuer. In addition, KeySpan plans to enter into an underwriting agreement pursuant to which it would agree, among other things, not to transfer, without the prior written consent of the underwriters and subject to certain exceptions, any shares of Common Stock during the period ending 90 days after the date of the prospectus supplement relating to the offering of shares of Common Stock. As part of the transactions, THEC would also agree that, upon consummation of the proposed transactions described in Item 4, for a period of three years, THEC would agree not to increase its ownership interest in the Issuer above the ownership interest it has at the time of consummation. Except as described in this Schedule 13D, or in the exhibits hereto, none of KeySpan, KEC or THEC, nor, to the best knowledge and belief of KeySpan, KEC and THEC, any of their respective directors or executive officers, is a party to any other contract, arrangement, understanding or relationship with respect to any securities of the Issuer, except that Mr. Cattel and Mr. McKessey have interests in stock options granted by the Issuer for compensation related to their service as directors of the Issuer. Mr. McKessey also receives an annual retainer and meeting fees associated with his services as a director of the Issuer. Item 7. Material to Be Filed as Exhibits Item 7 is hereby amended by adding the following text: 7. Joint Filing Agreement, dated May 25, 2004 among the Reporting Persons relating to the filing of a joint statement on Schedule 13D. 8. Press Release, dated May 24, 2004, issued by KeySpan Corporation. Page 8 of 12 Signature After reasonable inquiry and to the best of our knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Date: May 25, 2004 KEYSPAN CORPORATION By: /s/ Michael J. Taunton ---------------------- Name: Michael J. Taunton Title: Senior Vice President and Treasurer KEYSPAN ENERGY CORPORATION By: /s/ Michael J. Taunton ---------------------- Name: Michael J. Taunton Title: Senior Vice President and Treasurer THEC HOLDINGS CORP. By: /s/ Saiyed Zain Mirza --------------------- Name: Saiyed Zain Mirza Title: Senior Vice President and Chief Financial Officer Page 9 of 12 Annex A-1 The name, position and present principal occupation of each director and executive officer of KeySpan Corporation are set forth below. The Business address for each of the executive officers and directors listed below is KeySpan Corporation, One MetroTech Center, Brooklyn, New York 11201. All executive officers and directors listed below are United States citizens.
Name Position Present Principal Occupation - ----- -------- ---------------------------- Robert B. Catell Chairman, Chief Executive Officer and Director Chairman and Chief Executive Officer of KeySpan Corporation Robert J. Fani President and Chief Operating Officer President and Chief Operating Officer of KeySpan Corporation Wallace P. Parker, Jr. President - Energy Delivery and Customer President - Energy Delivery and Customer Relations Group Relations Group of KeySpan Corporation Steven L. Zelkowitz President - Energy Assets and Supply Group President - Energy Assets and Supply Group of KeySpan Corporation John A. Caroselli Executive Vice President - Strategic Services Executive Vice President - Strategic Services of KeySpan Corporation Gerald Luterman Executive Vice President and Chief Financial Executive Vice President and Chief Financial Officer Officer of KeySpan Corporation Anthony Nozzolillo Executive Vice President - Electric Operations Executive Vice President - Electric Operations of KeySpan Corporation Lenore F. Puleo Executive Vice President - Client Services Executive Vice President - Client Services of KeySpan Corporation Nicholas Stavropoulos Executive Vice President - KeySpan Energy Executive Vice President - KeySpan Energy Delivery New England Delivery New England of KeySpan Corporation John J. Bishar, Jr. Senior Vice President, General Counsel and Senior Vice President, General Counsel and Secretary Secretary of KeySpan Corporation Joseph F. Bodanza Senior Vice President and Chief Accounting Senior Vice President and Chief Accounting Officer Officer of KeySpan Corporation Michael J. Taunton Senior Vice President and Treasurer Senior Vice President and Treasurer of KeySpan Corporation Theresa A. Balog Vice President and Controller Vice President and Controller of KeySpan Corporation Lawrence Dryer Vice President and General Auditor Vice President and General Auditor of KeySpan Corporation Andrea S. Christensen Director Partner, Kaye Scholer LLP Alan H. Fishman Director President and Chief Executive Officer, Independence Community Bank Corp. Page 10 of 12 J. Atwood Ives Director Former Chairman and Chief Executive Officer, Eastern James R. Jones Director Chairman and Chief Executive Officer of Manatt Jones Global Strategies LLP James L. Larocca Director Professor of Public Policy, Long Island University's Southampton College Gloria C. Larson Director Of Counsel and Co-Chair of the Government Practices Group, Foley Hoag LLP Stephen W. McKessy Director Retired Vice Chairman, PricewaterhouseCoopers Edward D. Miller Director Member of the Supervisory Board and Senior Advisor to the Chief Executive Officer, AXA Group Vikki L. Pryor Director President and Chief Executive Officer, SBLI Mutual Insurance Company, Inc.
Page 11 of 12 Annex A-2 The name, position and present principal occupation of each director and executive officer of KeySpan Energy Corporation are set forth below. The Business address for each of the executive officers and directors listed below is KeySpan Energy Corporation, One MetroTech Center, Brooklyn, New York 11201. All executive officers and directors listed below are United States citizens.
Name Position Present Principal Occupation - ----- -------- ---------------------------- Robert B. Catell President, Chief Executive Officer and Chairman and Chief Executive Officer of Director KeySpan Corporation John J. Bishar, Jr. Senior Vice President and Secretary Senior Vice President, General Counsel and Secretary of KeySpan Corporation Michael J. Taunton Senior Vice President and Treasurer Senior Vice President and Treasurer of KeySpan Corporation Alfred C. Bereche Assistant Secretary Assistant General Counsel of KeySpan Corporation Sandra M. Cano Assistant Secretary Manager, Corporate Secretary's Office of KeySpan Corporate Services LLC Ronald S. Macklin Assistant Secretary Assistant General Counsel of KeySpan Corporate Services LLC Colleen A. Meade Assistant Secretary Counsel of KeySpan Corporate Services LLC
Page 12 of 12 Annex A-3 The name, position and present principal occupation of each director and executive officer of THEC are set forth below. The Business address for each of the executive officers and directors listed below is THEC Holding Corp., One MetroTech Center, Brooklyn, New York 11201. All executive officers and directors listed below are United States citizens, except for H. Neil Nichols who is a Canadian citizen with work permit.
Name Position Present Principal Occupation - ----- -------- ---------------------------- H. Neil Nichols President and Director President, KeySpan Energy Development Corporation S. Zain Mirza Senior Vice President, Chief Financial Officer and Director Senior Vice President, KeySpan Energy Development Corporation John J. Bishar, Jr. Senior Vice President and Secretary Senior Vice President, General Counsel and Secretary of KeySpan Corporation Michael J. Nilsen Vice President, Treasurer, Comptroller and Vice President - Finance, KeySpan Energy Director Development Corporation Alfred C. Bereche Vice President and Assistant Secretary Assistant General Counsel of KeySpan Corporation Sandra M. Cano Assistant Secretary Manager, Corporate Secretary's Office of KeySpan Corporate Services LLC Colleen A. Meade Assistant Secretary Counsel of KeySpan Corporate Services LLC
INDEX OF EXHIBITS Number Description 7 Joint Filing Agreement, dated May 25, 2004, among the Reporting Persons relating to the filing of a joint statement on Schedule 13D. 8 Press Release, dated May 24, 2004, issued by KeySpan Corporation. Exhibit 7 JOINT FILING AGREEMENT In accordance with Rule 13d-1(k) promulgated under the Securities Exchange Act of 1934, as amended, the undersigned hereby agree to the joint filing with all other Reporting Persons (as such term is defined in the Schedule 13D referred to below) on behalf of each of them of a Statement on Schedule 13D (including amendments thereto) with respect to the Common Stock, par value $0.01 per share, of The Houston Exploration Company, a Delaware corporation, and that this Agreement may be included as an Exhibit to such joint filing. This Agreement may be executed in any number of counterparts, all of which together shall constitute one and the same instrument. IN WITNESS WHEREOF, the undersigned hereby execute this Agreement as of the 25th day of May 2004. KEYSPAN CORPORATION By: /s/ Michael J. Taunton ---------------------- Name: Michael J. Taunton Title: Senior Vice President and Treasurer KEYSPAN ENERGY CORPORATION By: /s/ Michael J. Taunton ---------------------- Name: Michael J. Taunton Title: Senior Vice President and Treasurer THEC HOLDINGS CORP. By: /s/ Saiyed Zain Mirza --------------------- Name: Saiyed Zain Mirza Title: Senior Vice President and Chief Financial Officer Exhibit 8 Press Release, dated May 24, 2004, issued by KeySpan Corporation is attached. NEWS - -------------------------------------------------------------------------------- KeySpan Corporation For Immediate Release Contacts: Investors Media Relations George Laskaris Andrea Staub 718.403.2526 516.545.5052 516.824.1241 (pager) KeySpan Reduces its Ownership in Houston Exploration from 55% to 24% through an Exchange for a Houston Exploration Subsidiary KeySpan Corporation (NYSE:KSE) announced today that the company plans to enter into an agreement with The Houston Exploration Company (NYSE:THX) under which KeySpan will transfer to Houston Exploration 10.8 million shares of Houston Exploration common stock in exchange for 100% of a wholly owned Houston Exploration subsidiary, Seneca-Upshur Petroleum, Inc. At the time of the exchange, the subsidiary will hold all of Houston Exploration's Appalachian Basin assets and an amount of additional cash calculated so as to equalize the value of the operating business and the Houston Exploration shares being exchanged. The transaction is consistent with the business strategies of both KeySpan and Houston Exploration. As previously discussed, KeySpan does not consider Houston Exploration to be a strategic holding and has been working to restructure its stake in the company in a manner that will be beneficial to both KeySpan and Houston Exploration. "This transaction represents an important step to restructuring our interest in Houston Exploration. We welcome Seneca-Upshur into the KeySpan family and intend to grow this business through additional investments in energy related assets that support our core businesses," said Robert B. Catell, KeySpan's Chairman and Chief Executive Officer. "This transaction allows the Company to further concentrate on executing its strategy of growing its core energy businesses." The parties have ascribed a value of $60 million dollars to the Appalachian Basin producing assets. At December 31, 2003, these properties had proved reserves of 50.5 billion cubic feet of natural gas equivalent (Bcfe), or approximately 7 percent of Houston Exploration's total proved reserves. The Appalachian assets include properties originally acquired and owned by a predecessor company to KeySpan in the early 1970's to strengthen its gas supply strategy. At the time of the transaction, it is expected that Seneca-Upshur will have cash in excess of $350 million based on the initial offering price assumptions set forth below. This KeySpan subsidiary plans to use the cash to make additional investments in energy related assets. Of the 10.8 million shares that Houston Exploration expects to receive from KeySpan, Houston Exploration intends to retire approximately 4.6 million shares and plans to offer 6.2 million shares of common stock in a public offering. The value of the exchange will be dependent on the ultimate public offering price of the Houston Exploration shares in the offering. Assuming an initial public offering price of $45.01 (which is the May 21,2004, NYSE last sale for Houston Exploration), KeySpan will receive a per share value equal to $40.09, before expenses. The value per share received by KeySpan will increase or decrease, as the case may be, by approximately $0.51 per share for a corresponding $1.00 increase or decrease in the public offering price of $45.01 per share. This transaction will reduce KeySpan's ownership interest in Houston Exploration to approximately 24% from the current 55% level with the number of outstanding shares being reduced from approximately 17.4 million shares to approximately 6.6 million shares. In addition, three of KeySpan's five designated directors on the Houston Exploration Board will resign at the closing of the transaction, and KeySpan will retain the right to nominate two of the remaining seven directors on the Houston Exploration Board. Consummation of this transaction is subject to each party's satisfaction with the public offering price. Accordingly, no assurance can be given that the transaction will be completed. The underwriters will be granted an option to purchase an additional 930,000 shares of common stock to cover any over-allotments. If this over-allotment is exercised in full, KeySpan's ownership interest in Houston Exploration will be reduced to approximately 22.5%. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities law of any state. - -------------------------------------------------------------------------------- A member of the Standard & Poor's 500 Index, KeySpan Corporation (NYSE:KSE) is the fifth largest distributor of natural gas in the United States and the largest in the Northeast, operating regulated gas utilities in New York, Massachusetts and New Hampshire, serving 2.5 million customers. These customer-focused businesses are complemented by a portfolio of service companies which offer energy-related products, services and solutions to homes and businesses. KeySpan is also the largest electric generator in New York State. We own approximately 6,600 megawatts of generating capacity, providing power to 1.1 million customers of the Long Island Power Authority on Long Island and supplying approximately 25 percent of New York City's capacity needs. In addition to these assets, KeySpan has strategic investments in natural gas exploration, production, pipeline transportation, distribution and storage, and Canadian gas processing. KeySpan has headquarters in Brooklyn, New England and Long Island. For more information, visit KeySpan's web site at www.keyspanenergy.com. Certain statements contained herein are forward-looking statements, which reflect numerous assumptions and estimates and involve a number of risks and uncertainties. For these statements, we claim the protection of the safe harbor for forward-looking statements provided by the Private Securities Litigation Reform Act of 1995. There are possible developments that could cause our actual results to differ materially from those forecast or implied in the forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements, which are current only as of the date of this filing. We disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Among the factors that could cause actual results to differ materially are: general economic conditions, especially in the Northeast United States; available sources and costs of fuel; volatility of energy prices in a deregulated market environment as well as in the source of natural gas and fuel used to generate electricity; potential write-down of our investment in natural gas properties when natural gas prices are depressed or if we have significant downward revisions in our estimated proved gas reserves; federal and state regulatory initiatives that increase competition, threaten cost and investment recovery and impact rate structure; our ability to successfully reduce our cost structures; implementation of new accounting standards; the degree to which we develop unregulated business ventures, as well as federal and state regulatory policies affecting our ability to retain and operate those business ventures; our ability to identify and make complementary acquisitions, as well as the successful integration of those acquisitions; inflationary trends and interest rates; and risks detailed from time to time in reports and other documents filed by us with the Securities and Exchange Commission. 2 -----END PRIVACY-ENHANCED MESSAGE-----