"We believe the current stock price does not reflect the value of the company's transformation into a pure-play exploration and production company with two large resource plays in the Rockies, identified production growth and meaningful unbooked discoveries," said Luke R. Corbett, Kerr-McGee chairman and chief executive officer. "The impact of the debt reduction coupled with the stock repurchase enables the company to enhance value for our stockholders while maintaining a strong capital structure."
Under the approved stock repurchase program, shares may be purchased from time to time in the open market or through privately negotiated transactions at prevailing prices. The company expects to begin the repurchases following the release of its 2005 financial results on Jan. 25, 2006.
Through the redemption of the debentures, the company expects to realize cash interest savings of approximately $18 million per year through 2011, and reduce balance sheet debt by approximately $180 million. As a result of the redemption, the company expects to take an after-tax earnings charge of approximately $45 million in the current quarter.
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