A special shareholders' meeting of US-based Spinnaker Exploration Company on Tuesday adopted the merger agreement with Norsk Hydro ASA, approved by the Board of Directors of both companies in September.
A majority of the votes supported the merger. Hydro would later the same day complete the acquisition in an all-cash transaction for US $2.45 billion.
Hydro will pay US $65.50 per share in cash for all outstanding shares of Spinnaker Exploration. Hydro will also assume approximately US $137 million in net interest-bearing debt.
High-quality development projects
As announced November 21, 2005, Hydro has entered into a price hedging program for the majority of Spinnaker Exploration's expected oil and gas production for the period 2006 to 2008. Hydro has secured the crude oil price (West Texas Intermediate reference) between US $45/boe and US $71.45 boe for a total volume of 15.4 million boe for the three-year period at zero premium paid by Hydro. Additionally, Hydro has purchased natural gas put options with a strike price (Henry Hub reference) of US $7.5 per mmbtu (million British thermal units) for a total volume of 121,050,491 mmbtu, equivalent to 20.5 million boe for the three-year period. The option premium per mmbtu is US $0.78 and will be paid monthly during the hedging period. Effectively, Hydro has established a minimum price floor for the hedged gas volume of US $6.72 per mmbtu.