Phillips completes purchase of ARCO's Alaska businesses
Thursday, August 3rd 2000, 12:00 am
By: News On 6
BARTLESVILLE, Okla. (AP) -- Closing on a deal for certain pipeline interests and marine assets, Phillips Petroleum has completed a $6.5 billion purchase of the Atlantic Richfield Co.'s properties in Alaska, company officials announced Thursday.
The $965 million deal that closed this week adds to the company's April purchase of interest in the Trans Alaska Pipeline System, interests in other pipelines and three double-hulled tankers being constructed.
Phillips paid $700 million in cash and assumed $265 million in debt for the most recent acquisition. "The acquisition in Alaska is a significant part of our strategy of growing our exploration and production business," said Jim Mulva, Phillips' chief executive officer.
Mulva said the acquisition has doubled the company's worldwide reserves and significantly increased its daily crude oil production. The closing brings the total cash paid and debt assumed for the acquisition to just under $6.5 billion.
Mulva said the company's debt balance remains under $8.1 billion, despite the acquisition in Alaska. "We expect to further decrease our debt and improve our debt-to-capital ratio by year end, in keeping with our plan to continually improve our financial position," Mulva said.
Partly to reflect the acquisition's completion, Phillips has revised its 2000 capital budget to $2.3 billion, up from an initial budget of $1.8 billion. That total excludes the price of the purchase of ARCO's Alaska acquisitions. Phillips is a Bartlesville-based petroleum company engaged in oil and gas exploration, gathering, processing and marketing.