Conoco Completes Tender Offer For Gulf Canada
Conoco Inc. announced the successful completion of the C$12.40 cash tender offer by its wholly owned Canadian subsidiary, Conoco Northern Inc., to purchase all of the outstanding ordinary shares of Gulf Canada Resources Limited. The offer expired, as scheduled, at 6 p.m. MDT (8 p.m. EDT) on Friday, July 13, 2001.
Based on preliminary information, Conoco has accepted 532,875,755 tendered ordinary shares of Gulf Canada, representing approximately 96 percent of Gulf Canada's outstanding ordinary shares. Conoco will take up and pay for the ordinary shares that have been tendered and will immediately acquire the remaining ordinary shares of Gulf Canada by statutory acquisition for C$12.40 per ordinary share in cash.
The transaction is accretive to earnings per share and to cash flow, and combined with reduced capital spending, synergies between the two companies and asset dispositions, will enable the company to quickly reduce a significant portion of the acquisition-related debt.
The transaction will allow Conoco to increase its total worldwide reserves (including syncrude) by almost 40 percent to 3.7 billion barrels of oil equivalent (BOE), based on year-end 2000 totals. Total worldwide production will increase 32 percent to 335 million BOE in 2001. The acquired properties offer the potential to add 1.2 billion BOE from probable reserves (including syncrude) already identified.
Conoco's North American natural gas production and proved natural gas reserves will increase by 50 percent to 1.4 billion cubic feet per day (BCFD) and 4.1 trillion cubic feet (TCF) net, respectively. Conoco's proforma North American liquids production (crude oil, syncrude and NGLs) will more than double, and proved North American liquids reserves (including syncrude) will more than triple.
Southeast Asia will become a fourth core area for Conoco through Gulf Canada's 72 percent interest in Gulf Indonesia Resources Limited. Other core areas are North America, Europe and northern South America. Conoco will more than double its proved reserves in Southeast Asia and more than triple 2000's total net production from the region.