By OGJ editors
HOUSTON, Aug. 8 -- Maersk Olie & Gas AS, Copenhagen, plans to buy most of Kerr-McGee Corp.'s North Sea assets for $2.95 billion. The UK's Centrica PLC agreed to buy four North Sea fields and exploration acreage from the Oklahoma City producer for $566 million.
The buyers assumed all related abandonment obligations, which totaled $182 million as of June 30. The buyers also agreed to assume $175 million in after-tax derivative liabilities.
Subject to approval from government agencies, the transactions are expected to close during the fourth quarter.
"Our remaining oil and gas property portfolio will be weighted toward longer-life, less capital-intensive properties," said David Hager, Kerr-McGee chief operating officer.
Kerr-McGee plans to accelerate development drilling in the Wattenberg and Greater Natural Buttes areas of the Rocky Mountain region. The company also wants to focus on the deepwater Gulf of Mexico, Hager said.
Divestiture details
Kerr-McGee's North Sea assets include proved reserves of 231 million boe. Its North Sea production for the second quarter averaged 77,700 boe/d, representing 21% of the company's total second-quarter production.
At closings, Kerr- McGee expects net after-tax cash proceeds to be $3.1 billion. The company plans to use all net proceeds to reduce debt.
Kerr-McGee plans to sell some Gulf of Mexico shelf properties and selected US onshore properties. The total combined divestitures are expected to represent 25-30% of the company's proved reserves as of Dec. 31, 2004.
In addition, Kerr-McGee is proceeding with efforts to sell or spin off its chemical business, the world's third-largest producer and marketer of titanium dioxide (OGJ Online, Mar. 9, 2005).
Kerr-McGee expects to complete the chemical business separation and most of the divestitures before yearend.
