MERGER AGREEMENT WITH ZaZa	3 Months Ended
Sep. 30, 2011
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS [Abstract]
Merger Agreement ZaZa	NOTE 2 – PROPOSED MERGER WITH ZAZA ENERGY, LLC On August 9, 2011, Toreador entered into an Agreement and Plan of Merger and Contribution dated August 9th, 2011, by and among Toreador Resources Corporation, ZaZa Energy, LLC (“ZaZa”), ZaZa Energy Corporation (“New ZaZa”) and Thor Merger Sub Corporation (“Thor Merger Sub”). Pursuant to the merger agreement, Thor Merger Sub will merge with and into Toreador, with Toreador as the surviving corporation and becoming a wholly owned subsidiary of New ZaZa. In the merger, each outstanding share of Toreador common stock will be converted into the right to receive one share of New ZaZa common stock. Simultaneously with the proposed merger, pursuant to a contribution agreement entered into concurrently with the merger agreement, each of the three holders of the limited liability company interests of ZaZa will contribute to New ZaZa the one-third of the outstanding limited liability company interests of ZaZa owned directly or indirectly by such holder in exchange for shares of New ZaZa common stock and $45.2 million in cash and/or newly issued subordinated secured promissory notes of New ZaZa. The subordinated secured promissory notes will bear interest at a rate of 8% per annum, will require New ZaZa to make monthly interest payments on the last day of each calendar month and will mature on the fourth anniversary of the closing, subject to mandatory prepayments in specified circumstances. They will also be secured by the limited liability company interests of ZaZa held by New ZaZa after the transactions and subordinated to up to $150 million of future senior indebtedness of New ZaZa. This $45.2 million in cash and/or subordinated secured promissory note consideration is referred to herein as the “ZaZa non-equity consideration.” The ZaZa non-equity consideration will be paid in the form of subordinated secured promissory notes, rather than in the form of cash, if and to the extent that the payment of the ZaZa non-equity consideration in cash would give rise to a failure of the minimum cash condition, as described below. Also simultaneously with the proposed merger, pursuant to a contribution agreement entered into concurrently with the merger agreement, the holders of net profits interests in ZaZa have agreed to exchange all of the outstanding net profits interests in ZaZa in exchange for $4.8 million in cash. Immediately following the proposed merger and contributions described above, Toreador and ZaZa will be wholly owned subsidiaries of New ZaZa. After completion of the transactions, the former Toreador stockholders and the former holders of limited liability company interests in ZaZa will own 25% and 75%, respectively, of the outstanding shares of New ZaZa common stock. Toreador's obligation to consummate the proposed merger and the obligation of the equity holders of ZaZa to consummate the contribution transactions contemplated by the merger agreement are subject to certain customary conditions, including material accuracy of representations and warranties of the other party, performance by the other party of its covenants in all material respects and that no material adverse effect with respect to Toreador or ZaZa has occurred. The consummation of the transactions under the merger agreement also depends on a number of certain additional conditions being satisfied or waived: the approval of the merger agreement by the holders of a majority of the outstanding shares of Toreador common stock; the absence of orders or injunctions of U.S. or French courts prohibiting the consummation of the transactions; the declaration of the effectiveness by the SEC of the registration statement of New ZaZa; the listing of New ZaZa common stock on the Nasdaq Global Market; and the obtaining of required clearance from the French Bureau of Exploration and Production of Hydrocarbons, which occurred on October 25, 2011. In addition, each of Toreador's and ZaZa's obligations to consummate the transactions contemplated by the merger agreement is subject to the condition that the sum of the following amounts is not less than $10 million: Toreador's and ZaZa's cash immediately before closing, plus the amount of Toreador's and ZaZa's borrowing capacity immediately before closing that will remain in effect after closing, plus the amount of any cash of New ZaZa, Toreador and ZaZa reasonably expected to be funded (whether by borrowings, issuance or equity interests or otherwise) prior to or substantially concurrently with closing, plus any borrowing capacity reasonably expected to be available to New ZaZa, Toreador and ZaZa within five business days of closing, minus any cash amounts payable by New ZaZa, Toreador and ZaZa in connection with the closing. This closing condition is referred to as the “minimum cash condition.” Toreador and ZaZa estimate that New ZaZa, Toreador and/or ZaZa may need to raise up to $76 million of financing (less any unrestricted cash on hand at closing) for the minimum cash condition to be satisfied. Under the terms of the merger agreement, Toreador may be required to pay ZaZa a termination fee of $3,500,000 if: Toreador terminates the merger agreement to enter into a definitive transaction agreement for a superior proposal; ZaZa terminates the merger agreement because, prior to the meeting of Toreador's stockholders, the board of directors of Toreador withdraws or modifies its recommendation that Toreador's stockholders approve the merger agreement, approves any letter of intent, memorandum of understanding, agreement relating to any acquisition proposal for Toreador; or approves or recommends any acquisition proposal for Toreador; an acquisition proposal for Toreador has been made to Toreador or been publicly disclosed, either Toreador or ZaZa terminates the merger agreement because the transactions contemplated thereby have not been consummated by June 30, 2012 and as of the date of such termination, the closing conditions relating to the accuracy of representations and warranties or compliance with covenants have been satisfied with respect to ZaZa but not Toreador, and within 12 months after such termination, Toreador enters into, or consummates, a definitive agreement for an acquisition proposal for Toreador (where references in the definition of acquisition proposal to 20% or more are deemed to be references to 50% or more); or an acquisition proposal for Toreador has been made to Toreador or been publicly disclosed, either Toreador or ZaZa terminates the merger agreement because the Toreador stockholders have voted on, but not approved, the merger agreement, and within 12 months after such termination, Toreador enters into, or consummates, a definitive agreement for an acquisition proposal for Toreador (where references in the definition of acquisition proposal to 20% or more are deemed to be references to 50% or more). Toreador also may be required to reimburse ZaZa's out of pocket expenses up to a maximum of $750,000 if ZaZa terminates the merger agreement because there has been a breach by Toreador of any of its representations, warranties or covenants in the merger agreement or any of its representations or warranties become untrue such that the relevant closing conditions relating to the accuracy of Toreador's representations and warranties or its compliance with its covenants cannot be satisfied. ZaZa will reimburse Toreador's out of pocket expenses up to a maximum of $750,000 if Toreador terminates the merger agreement because there has been a breach by ZaZa or any of its members of any of their respective representations, warranties or covenants in the merger agreement or the contribution agreement or any of their representations or warranties become untrue such that the relevant closing conditions relating to the accuracy of ZaZa's and its members' representations and warranties or their compliance with their covenants, as the case may be, cannot be satisfied. The foregoing description of the merger agreement, contribution agreement and net profits interest contribution agreement are qualified in their entirety by reference to the full text of such agreements, copies of which have been filed on Toreador's Current Report on Form 8-K dated August 10, 2011 and listed as Exhibits 2.1, 2.2, and 2.3 hereto, respectively and are incorporated herein by reference.

MERGER AGREEMENT WITH ZaZa

3 Months Ended

Sep. 30, 2011

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS [Abstract]

NOTE 2 – PROPOSED MERGER WITH ZAZA ENERGY, LLC

On August 9, 2011, Toreador entered into an Agreement and Plan of Merger and Contribution dated August 9th, 2011, by and among Toreador Resources Corporation, ZaZa Energy, LLC (“ZaZa”), ZaZa Energy Corporation (“New ZaZa”) and Thor Merger Sub Corporation (“Thor Merger Sub”). Pursuant to the merger agreement, Thor Merger Sub will merge with and into Toreador, with Toreador as the surviving corporation and becoming a wholly owned subsidiary of New ZaZa. In the merger, each outstanding share of Toreador common stock will be converted into the right to receive one share of New ZaZa common stock.

Simultaneously with the proposed merger, pursuant to a contribution agreement entered into concurrently with the merger agreement, each of the three holders of the limited liability company interests of ZaZa will contribute to New ZaZa the one-third of the outstanding limited liability company interests of ZaZa owned directly or indirectly by such holder in exchange for shares of New ZaZa common stock and $45.2 million in cash and/or newly issued subordinated secured promissory notes of New ZaZa. The subordinated secured promissory notes will bear interest at a rate of 8% per annum, will require New ZaZa to make monthly interest payments on the last day of each calendar month and will mature on the fourth anniversary of the closing, subject to mandatory prepayments in specified circumstances. They will also be secured by the limited liability company interests of ZaZa held by New ZaZa after the transactions and subordinated to up to $150 million of future senior indebtedness of New ZaZa. This $45.2 million in cash and/or subordinated secured promissory note consideration is referred to herein as the “ZaZa non-equity consideration.” The ZaZa non-equity consideration will be paid in the form of subordinated secured promissory notes, rather than in the form of cash, if and to the extent that the payment of the ZaZa non-equity consideration in cash would give rise to a failure of the minimum cash condition, as described below. Also simultaneously with the proposed merger, pursuant to a contribution agreement entered into concurrently with the merger agreement, the holders of net profits interests in ZaZa have agreed to exchange all of the outstanding net profits interests in ZaZa in exchange for $4.8 million in cash.

Immediately following the proposed merger and contributions described above, Toreador and ZaZa will be wholly owned subsidiaries of New ZaZa. After completion of the transactions, the former Toreador stockholders and the former holders of limited liability company interests in ZaZa will own 25% and 75%, respectively, of the outstanding shares of New ZaZa common stock.

Toreador's obligation to consummate the proposed merger and the obligation of the equity holders of ZaZa to consummate the contribution transactions contemplated by the merger agreement are subject to certain customary conditions, including material accuracy of representations and warranties of the other party, performance by the other party of its covenants in all material respects and that no material adverse effect with respect to Toreador or ZaZa has occurred. The consummation of the transactions under the merger agreement also depends on a number of certain additional conditions being satisfied or waived:

the approval of the merger agreement by the holders of a majority of the outstanding shares of Toreador common stock;
the absence of orders or injunctions of U.S. or French courts prohibiting the consummation of the transactions;
the declaration of the effectiveness by the SEC of the registration statement of New ZaZa;
the listing of New ZaZa common stock on the Nasdaq Global Market; and
the obtaining of required clearance from the French Bureau of Exploration and Production of Hydrocarbons, which occurred on October 25, 2011.

In addition, each of Toreador's and ZaZa's obligations to consummate the transactions contemplated by the merger agreement is subject to the condition that the sum of the following amounts is not less than $10 million:

Toreador's and ZaZa's cash immediately before closing, plus
the amount of Toreador's and ZaZa's borrowing capacity immediately before closing that will remain in effect after closing, plus
the amount of any cash of New ZaZa, Toreador and ZaZa reasonably expected to be funded (whether by borrowings, issuance or equity interests or otherwise) prior to or substantially concurrently with closing, plus
any borrowing capacity reasonably expected to be available to New ZaZa, Toreador and ZaZa within five business days of closing, minus
any cash amounts payable by New ZaZa, Toreador and ZaZa in connection with the closing.

This closing condition is referred to as the “minimum cash condition.” Toreador and ZaZa estimate that New ZaZa, Toreador and/or ZaZa may need to raise up to $76 million of financing (less any unrestricted cash on hand at closing) for the minimum cash condition to be satisfied.

Under the terms of the merger agreement, Toreador may be required to pay ZaZa a termination fee of $3,500,000 if:

Toreador terminates the merger agreement to enter into a definitive transaction agreement for a superior proposal;
ZaZa terminates the merger agreement because, prior to the meeting of Toreador's stockholders, the board of directors of Toreador withdraws or modifies its recommendation that Toreador's stockholders approve the merger agreement, approves any letter of intent, memorandum of understanding, agreement relating to any acquisition proposal for Toreador; or approves or recommends any acquisition proposal for Toreador;
an acquisition proposal for Toreador has been made to Toreador or been publicly disclosed, either Toreador or ZaZa terminates the merger agreement because the transactions contemplated thereby have not been consummated by June 30, 2012 and as of the date of such termination, the closing conditions relating to the accuracy of representations and warranties or compliance with covenants have been satisfied with respect to ZaZa but not Toreador, and within 12 months after such termination, Toreador enters into, or consummates, a definitive agreement for an acquisition proposal for Toreador (where references in the definition of acquisition proposal to 20% or more are deemed to be references to 50% or more); or
an acquisition proposal for Toreador has been made to Toreador or been publicly disclosed, either Toreador or ZaZa terminates the merger agreement because the Toreador stockholders have voted on, but not approved, the merger agreement, and within 12 months after such termination, Toreador enters into, or consummates, a definitive agreement for an acquisition proposal for Toreador (where references in the definition of acquisition proposal to 20% or more are deemed to be references to 50% or more).

Toreador also may be required to reimburse ZaZa's out of pocket expenses up to a maximum of $750,000 if ZaZa terminates the merger agreement because there has been a breach by Toreador of any of its representations, warranties or covenants in the merger agreement or any of its representations or warranties become untrue such that the relevant closing conditions relating to the accuracy of Toreador's representations and warranties or its compliance with its covenants cannot be satisfied.

ZaZa will reimburse Toreador's out of pocket expenses up to a maximum of $750,000 if Toreador terminates the merger agreement because there has been a breach by ZaZa or any of its members of any of their respective representations, warranties or covenants in the merger agreement or the contribution agreement or any of their representations or warranties become untrue such that the relevant closing conditions relating to the accuracy of ZaZa's and its members' representations and warranties or their compliance with their covenants, as the case may be, cannot be satisfied.

The foregoing description of the merger agreement, contribution agreement and net profits interest contribution agreement are qualified in their entirety by reference to the full text of such agreements, copies of which have been filed on Toreador's Current Report on Form 8-K dated August 10, 2011 and listed as Exhibits 2.1, 2.2, and 2.3 hereto, respectively and are incorporated herein by reference.