Noble Energy Inc. and Patina Oil & Gas Corp. have received their boards' approval for Noble to acquire Patina for $3.4 billion, including the assumption of Patina's debt.
Patina produces oil and gas mainly in the Rocky Mountain and Midcontinent areas of the US. Most of Noble Energy's operations are on the Gulf Coast, in the deepwater Gulf of Mexico, and outside the US.
In other recent upstream news:
- Anadarko Petroleum Corp. has reallocated $150-200 million from drilling and related activities to additional repurchases of its common stock. The company's revised 2005 capital spending plan is $2.7-3 billion.
- Esso SAF is soliciting bids for its 90% stake in Esso REP, its exploration and production affiliate in France. Total owns the other 10%.
- Investors have oversubscribed the initial public offering of Bill Barrett Co., Denver.
- In recent downstream news:
- Shell Oil Products US has signed an agreement to sell its 70,000 b/d Bakersfield, Calif., refinery to a subsidiary of Flying J Inc. The sale will replace controversial plans to close the refinery in March (OGJ Online, Dec. 7, 2004).
Noble-Patina
Patina will become the subsidiary of a combined Houston-based company known as Noble Energy, with Patina's Denver offices serving as a branch.
Patina's reserves at yearend 2003 included 36.4 million bbl of oil and 593 bcf of natural gas in Wattenberg field in Colorado, 30.5 million bbl of oil and 278 bcf of gas in the Midcontinent area, 349,000 bbl of oil and 132 bcf of gas in the San Juan basin, and 14.7 million bbl of oil and 21.5 bcf of gas in the central US and other regions.
In 2003, Patina produced an average of 15,720 b/d of oil and 179.6 MMcfd of gas.
The combined company will hold 710 million boe of oil and gas reserves, 55% in the US. Its initial production will be 61,400 b/d of oil and 602 MMcfd of gas.
The acquisition is expected to close in March or April.
Charles D. Davidson, Noble Energy president and CEO, will head the new company as chairman, president, and CEO. Patina Chairman and CEO Tom Edelman will join Noble Energy's board and help in the integration of the companies.
Anadarko stock buyback
Jim Hackett, Anadarko president and CEO, said the company's stock buyback program reached $1.3 billion in 2004. That goal had not been expected until early 2005.
"We expect to continue an active buyback program in 2005, first utilizing the monies from the reduced capital program. In addition, we currently plan to direct about half of free cash flow available from operations in 2005 to further share repurchases," he said.
As conditions change, the company will manage toward higher per-share returns, Hackett said, adding that oil and natural gas prices have fallen since Anadarko announced its 2005 budget in November 2004.
"The development drilling prospects are still economically viable projects and are important to our portfolio. We are simply deferring them until a more opportune time," Hackett said. Anadarko's 2005 capital spending plan still includes $1 billion of development drilling.
Esso SAF unit sale
Esso SAF said it is offering the E&P unit for sale as part of its policy of optimizing assets. Last year Esso REP reported operating profits of 19 million euros; Esso SAF's refining and retailing activities generated operating profits of 116 million euros.
Esso REP started exploring in France in the early 1950s. It discovered Parentis oil field in the Aquitaine basin in 1954. It sold the field in 1997 to Vermilion REP, an affiliate of Canada's Vermilion Energy Trust.
Esso REP currently operates seven oil fields in France and is the country's largest oil producer. It produced a total of 278,000 tonnes of oil in 2003 and expects to produce slightly less than 250,000 tonnes this year.
Two thirds of the production comes from Les Arbousiers, Les Pins, Courbey, Tamaris, and Cazaux fields in the Aquitaine basin of southwestern France. In the same area, the company last year discovered Les Mimosas oil field, which is not yet producing.
In the Paris basin, Esso REP operates France's most prolific oil field, Chaunoy, which last year produced 95,000 tonnes of oil. The company holds interests in two smaller oil fields in the Paris basin—Itteville and Vert-le-Grand—in a joint venture with Total, the operator.
Esso SAF, an 82.89% subsidiary of ExxonMobil Corp., owns two refineries—Fos-sur-Mer in the south of France and Notre-Dame-de-Gravenchon in Normandy—and a minority interest in a third plus a distribution system. It has worked in France for more than 100 years.
Bill Barrett IPO
Bill Barrett Co.'s IPO is likely to have raised nearly $350 million for the Colorado independent, formed nearly 3 years ago (OGJ, Apr. 15, 2002, p. 36).
Bill Barrett Co. holds properties in several Rocky Mountain basins.
Owner Bill Barrett sold his previous company, Barrett Resources Corp., to Williams Cos. Inc., Tulsa, for $2.8 billion in 2001.
Shell's refinery sale
After regulatory approvals, Shell's sale of its Bakersfield plant is to be finalized in first quarter 2005. Terms of the sale were not disclosed. Shell's plans to close the refinery had encountered resistance from Californian political leaders concerned about product supply.
The refinery, which began operation in 1932 as the 1,500 b/d Mohawk Refinery in California's Central Valley, will be operated by Shell until the ownership transfer is complete.
Shell will continue to own and operate certain pipelines serving the refinery. Also, it will continue to own the nearby Bakersfield Products Terminal, but Flying J will operate it under a long-term lease. Shell will have an offtake agreement to receive products from Flying J and will continue to meet its supply obligations to branded customers and contracted diesel customers in the Central Valley through the Bakersfield Products Terminal and its West Coast supply network.
Flying J is an oil product marketer in the US West. Its wholly owned subsidiary Big West Oil LLC operates a 25,000 b/d refinery in North Salt Lake, Utah.
