Burlington To Acquire Canadian Hunter Exploration
Burlington Resources Inc. and Canadian Hunter Exploration Ltd. announced that they have entered into an agreement pursuant to which Burlington will make an offer to holders of the outstanding shares of Canadian Hunter to acquire all such shares for cash consideration of CDN $53 per share, representing an aggregate value of approximately U.S. $2.1 billion in cash (CDN $3.3 billion).
Canadian Hunter is one of Canada's most successful independent oil and gas companies. The acquisition of Canadian Hunter enhances Burlington's stature as a key player in the North American natural gas production business. It will almost double Burlington's existing investment in Canada, and add a portfolio of attractive producing properties characterized by low operating costs, long-lived reserves and promising exploration and exploitation potential.
Burlington will gain estimated proved reserves of 1.2 trillion cubic feet of natural gas and 6.2 million barrels of oil, along with approximately two million net undeveloped acres and extensive seismic data. Burlington has allocated $228 million of the aggregate purchase price to the undeveloped acreage and seismic data, and $250 million for processing plants and other infrastructure. In 2001, Burlington expects Canadian Hunter to average net production of 430 million cubic feet per day of natural gas and 2,700 barrels per day of oil and condensate. All volumes are reported using U.S. standards. Based on these data, Burlington's purchase cost equates to $1.27 per thousand cubic feet equivalent (Mcfe) of proved natural gas reserves and $4,640 per Mcfe of daily production.
The agreement was unanimously approved in special meetings of both companies' boards of directors, and the transaction is expected to close later in 2001. Merrill Lynch and Morgan Stanley acted as Burlington's financial advisors, and committed U.S. $1.9 billion of the total financing for the transaction. CIBC World Markets Inc. and Goldman, Sachs & Co. acted as Canadian Hunter's financial advisors.