Norsk Hydro acquiring Spinnaker Exploration

Sept. 19, 2005
Norsk Hydro ASA plans to acquire Spinnaker Exploration Co., Houston, in a $2.56 billion transaction geared to boost Norsk Hydro's presence in the Gulf of Mexico and raise its overall international production.

By OGJ editors
HOUSTON, Sept. 19 -- Norsk Hydro ASA plans to acquire Spinnaker Exploration Co., Houston, in a $2.56 billion transaction geared to boost Norsk Hydro's presence in the Gulf of Mexico and raise its overall international production.

Hydro agreed to pay $65.50/share for Spinnaker Exploration for a total of $2.45 billion and to assume $110 million in debt. Upon the transaction's completion, Hydro expects to achieve 40%/year worldwide production growth during 2005-08.

The boards of both companies approved the deal, which is expected to close in the fourth quarter. The acquisition remains subject to approval by Spinnaker's shareholders and US regulators.

Hydro Pres. and Chief Executive Officer Eivind Reiten said, "We believe that the deepwater potential in the Gulf of Mexico is considerable." He said Hydro will integrate its deepwater expertise with Spinnaker's assets.

Spinnaker's production is expected to reach 50,000 boe/d by 2008 compared with its current production of 23,000 boe/d. The independent reports 62 million boe of proved reserves.

The takeover will bring Hydro holdings in numerous gulf blocks, including 25% of Front Runner oil field. Spinnaker also produces oil and gas on the gulf shelf.