By OGJ editors
HOUSTON, July 11 -- Pogo Producing Co. agreed to acquire Northrock Resources Ltd., a wholly owned Canadian subsidiary of Unocal Corp., for $1.8 billion in a move that will give Pogo a new core area in western Canada.
The transaction is unrelated to Chevron Corp.'s pending acquisition of Unocal or CNOOC Ltd.'s unsolicited rival bid (OGJ Online, June 23, 2005). Unocal disclosed in May its intention to sell its Canadian exploration and production assets (OGJ Online, May 11, 2005).
Pending Canadian government approval, the Pogo-Northrock transaction is expected to close in the third quarter. The acquisition will increase Pogo's proved oil and gas reserves by 45% to 2 tcf of gas equivalent, increase its worldwide net acreage by 82% to 3.15 million net acres, and add more than 900 identified drilling opportunities.
Under the agreement, Pogo will acquire 644 bcfe of estimated proved reserves on 300,000 net acres, plus 1.1 million net acres of undeveloped leasehold. Pogo said the undeveloped acreage has numerous prospects.
Northrock operates 60% of its production, recently averaging 16,000 b/d of oil and natural gas liquids and 85 MMcfd of gas. Its reserves are 45% gas and 55% oil. Northrock's reserves life of 10 years extends Pogo's overall reserves life.
Northrock's development is concentrated in Saskatchewan and Alberta. It is exploring in the Northwest Territories, British Columbia, and the Alberta Foothills.