KERR-MCGEE plans HS Resources acquisition
Tuesday, May 15th 2001, 12:00 am
By: News On 6
OKLAHOMA CITY (AP) _ Kerr-McGee Corp. announced plans Monday to acquire HS Resources for $1.7 billion to expand its reserves and take advantage of growing natural gas markets.
Kerr-McGee will pay $66 per share _ 70 percent of it in cash and 30 percent in stock _ and assume about $450 million of San Francisco-based HS Resources' debt, the company said in a statement.
The Oklahoma City oil and chemicals company will acquire 1.3 trillion cubic feet of natural gas equivalent in reserves located in the Denver-Julesburg Basin of northeast Colorado. The deal will boost Kerr-McGee's natural gas reserves by 77 percent.
The reserves are located near one of the nation's fastest growing energy markets, officials said. Kerr-McGee expects to increase its daily production of U.S. natural gas by more than 45 percent after the transaction.
``These properties also offer the potential to add more than 500 billion cubic feet from probable reserves through identified projects that have a proven track record of success,'' said Luke R. Corbett, Kerr-McGee chairman and chief executive officer.
The boards of both companies have approved the deal, which now will be considered by HS Resources' shareholders. The purchase is expected to be completed during the third quarter of this year.
Corbett said Kerr-McGee intends to retain most of HS Resources' 370 employees.
``The combination of quality assets and their disciplined and successful exploration and production team further enhances the value of this transaction to Kerr-McGee,'' he said.