Occidental to buy Vintage Petroleum for $3.8-billion

Friday, October 14th 2005, 10:23 am
By: News On 6

SAN FRANCISCO (Dow Jones/AP) _ Tulsa-based Vintage Petroleum Inc. said late Thursday it has accepted a $3.8 billion cash and stock takeover offer from Occidental Petroleum Corp. Vintage shares soared 27 percent on the news.

The deal is the latest in a string of takeovers by larger oil companies seeking to boost oil and gas reserves through financial transactions rather than through exploration and development.

Vintage Petroleum, an independent oil and gas producer, estimated its proven reserves at 437 million barrels of oil equivalent at the end of 2004, 68 percent of which was crude oil and the rest natural gas.

Most of the reserves are on U.S. oil and gas fields that Vintage bought from other companies. The company began acquiring production acreage in Argentina and Bolivia in 1995 and has since expanded its overseas holdings to fields in Yemen.

Los Angeles-based Occidental is the biggest oil producer in Texas and leading natural gas producer in California, with oil, gas and chemical operations worldwide.

Under the terms of the takeover, Occidental will pay $20 plus 0.42 of an Occidental share for each of Vintage's 68.3 million common shares and assume Vintage's outstanding debt.

As part of this transaction, Occidental said it plans to repurchase 9 million of its shares in the open market, subject to market conditions and retention of the company's credit rating.

Occidental shares fell$1.97, or 2.6 percent, Thursday to close at $74.98 on the New York Stock Exchange. Vintage shares added $10.42, or 27 percent, to $49.01 after closing the regular session at $38.59.

Vintage said it expects the deal to close by the end of the first quarter 2006, pending shareholder and regulatory approval.