Merger and acquisition activity among major oil and gas firms and service and supply companies continues apace. Some recently announced deals include:
- Independent directors will recommend that Gulf Indonesia Resources Ltd.'s full board approve the $329 million offer by Conoco Canada Resources Ltd., Calgary, for all its stock not already owned by the Canadian firm, officials said.
- Shell Oil Products, a unit of Royal Dutch/Shell Group, has bought a $29 million equity stake in Iogen Energy Corp., a bioethanol technology company based in Ottawa, Canada.
- Friede Goldman Halter Inc., Gulfport, Miss., agreed to sell Halter Marine Inc., a leading builder of small to medium-sized offshore drilling rigs and other vessels, to Bollinger Shipyards Inc. for $48 million cash and other considerations.
Conoco Canada deal
Conoco Canada, a subsidiary of Conoco Inc., is offering $13.25/share for that remaining stock. It currently owns 72% of Gulf Indonesia, based in Jakarta. Acquisition of the minority interests will allow Conoco to optimize its operations in Southeast Asia, the company said.
A special committee of Gulf Indonesia's independent directors was formed Apr. 1 in anticipation of the cash offer submitted by Conoco Canada on May 24. The committee's recommendation is based on a number of factors, including an opinion from financial advisors that the offer is a fair one for minority shareholders, Conoco Canada said.
Conoco Canada's cash offer represents a 74% premium over the May 25 closing price for Gulf Indonesia's stock-1 day before Conoco announced its proposed acquisition of Gulf Indonesia's parent-and a 21% percent premium over the stock's average closing price for 30 days prior to the proposal, they said.
Conoco Canada is the former Gulf Canada Resources Ltd., which held 72% of Gulf Indonesia's outstanding common shares when Conoco acquired the Canadian company for $6.9 billion last year.
Conoco Canada's cash offer for the minority stock is subject to customary terms and conditions, including tender of most of those shares, approval by Gulf Indonesia's directors, and execution of definitive documentation.
The special committee's recommendation will be considered at a board meeting to be scheduled shortly. Gulf Indonesia's board is comprised of 11 directors, including 7 affiliated with Conoco or Conoco Canada.
Shell-Iogen transaction
The investment will enable Iogen to more rapidly develop the world's first commercial-scale biomass-to-ethanol plant, Shell Oil Products said.
Duncan Macleod, portfolio development manager of the London-based Shell affiliate Shell Global Solutions International, said, "Bioethanol can become commercially viable, and we will be using our skills in fuel production and plant operations with Iogen's globally recognized technology to reduce the cost of future production." Shell Global Solutions is Shell's technology business.
Conventional fuel ethanol is a high-octane alcohol fuel produced from the fermentation of sugar derived from the starch in grains such as corn and wheat. Bioethanol is made from the fermentation of sugars derived from plant fiber such as wood and straw.
Compared with gasoline, ethanol made from plant fiber releases over 90% lower carbon dioxide emissions, said a September 1997 report prepared by Interlaboratory Working Group on Energy-Efficient and Low-Carbon Technologies for the Office of Energy Efficiency and Renewable Energy within the US Department of Energy.
Bollinger acquisition
Bollinger will acquire all of Halter Marine's operating assets and properties, including the Halter Pascagoula, Halter Moss Point, Moss Point Marine, Halter Port Bienville, Halter Lockport, Halter Gulfport East Central, and Three Rivers facilities. The sale is expected to close in late July or early August, said officials.
Friede Goldman Halter filed for Chapter 11 protection in April 2001.
The pending acquisition "will expand our capacity and capabilities in new construction, establish our presence and visibility in new foreign and domestic markets, and will complement our extensive inventory of designs," said Donald Bollinger, chairman and CEO of Bollinger.
"Best of all, we will retain substantially all of Halter's dedicated employees, thereby gaining hundreds of highly talented and skilled designers and shipbuilders whose excellent reputation is known around the world," he said.
"Our goal," said Bollinger, "is to make the transition for our new employees and customers as seamless as possible. The transition went very smoothly when we acquired Halter's repair division in August 2000, and we will do it again."
Halter Marine is one of two core operating units out of the three business units presently operated by Friede Goldman Halter. The other core unit is Friede Goldman Offshore, which is involved in construction, upgrade, and repair of drilling units, mobile production units, and offshore construction equipment.
Friede & Goldman Ltd., a third unit involved in naval architecture and marine engineering, is expected to be sold in May through a bankruptcy court-approved auction process.
