By OGJ editors
HOUSTON, Jan. 23 -- Cal Dive International Inc., a Houston marine contractor with interests in oil and gas production, agreed to buy Remington Oil & Gas Corp. for $1.4 billion in cash and stock. Closing, expected during the second quarter, remains subject to approval by regulators and Remington shareholders.
Remington's board unanimously supports the transaction. Terms call for Remington shareholders to receive $27 in cash and 0.436 shares of Cal Dive stock for each Remington share.
Cal Dive Chairman and Chief Executive Officer Owen Kratz said, "Access to both deepwater hydrocarbon prospects and the available means to exploit them, as an operator, should lead to the continuation of our differentiated long-term earnings growth."
Remington estimated its 2005 proved reserves at 270-285 bcf of gas-equivalent. The company expects 2006 production to total 45-49 bcf of gas-equivalent. It produces from the Gulf of Mexico and onshore Gulf Coast.
Currently, 10 fields remain shut in because of hurricane-related damage to third-party pipelines. The Dallas oil company expects most production to be restored by the end of the first quarter.
Remington approved a 2006 capital budget of $293 million. The 2006 program assumes drilling of 26 offshore exploratory wells and 2 onshore exploratory wells for $146 million. Two of the 26 wells are in the deepwater Gulf of Mexico.
Development capital of $39 million will provide for platform and pipeline installations on recent discoveries, along with development drilling on existing fields. Remington allocated $73 million for development expenditures and $35 million for seismic acquisitions, workovers, and lease acquisitions.
The budget assumes three to four operated rigs working continuously during the year, Remington said.