COMPANY NEWS: CNR to buy Anadarko Canada in $4.24 billion deal

Oct. 2, 2006
Canadian Natural Resources Ltd. (CNR) plans to buy Anadarko Canada Corp. (ACC) for $4.24 billion.

Canadian Natural Resources Ltd. (CNR) plans to buy Anadarko Canada Corp. (ACC) for $4.24 billion. Anadarko is keeping its interests in the Mackenzie Delta and other Canadian arctic frontier properties.

In other recent company news:

• Tullow Oil PLC, London, has agreed to acquire Hardman Resources Ltd., Perth, for about $1.47 billion (Aus.). The transaction, subject to 65 million new Tullow shares being issued and approval by Hardman shareholders, is expected to be completed by early January 2007.

• Statoil ASA plans to acquire interest in two Gulf of Mexico deepwater discoveries-Big Foot and Caesar-and one prospect from Plains Exploration & Production Co. for $700 million.

CNR-Anadarko Canada

ACC’s land and production base are in Western Canada. Current production, before royalties, from the working interests being acquired by CNR, is 358 MMcfd of gas and 9,300 b/d crude oil and NGLs.

The assets include 1.5 million net undeveloped acres and key strategic facilities in the high-growth areas of northeastern British Columbia and northwestern Alberta. At yearend 2005, ACC reported proved reserves of 262 million boe, 75% of which was proved developed. The transaction, subject to normal closing conditions, is expected to close by Oct. 31.

Anadarko put its Canadian subsidiary up for sale to help raise $15 billion to reduce debt from its $21 billion purchases of Kerr-McGee Corp., Oklahoma City, and Western Gas Resources Inc., Denver (OGJ, July 10, 2006, p. 27).

CNR Pres. and Chief Operating Officer Steve Laut said the ACC acquisition strengthens the company’s asset and production base in key operating areas, specifically gas production.

The ACC assets contain more than 1,500 identified drilling locations. Existing infrastructure will allow low-cost development of ACC lands and adjacent CNR property, Laut said.


The acquisition will double Tullow’s prospective acreage and increase its production by 6,000 boe/d from a 19% interest from producing Chinguetti oil field off Mauritania. It also will increase Tullow’s proved and probable reserves by 30%, adding an additional 105 million boe of 2P commercial and contingent reserves. In addition, Tullow will gain operational control and 100% interest in Block 2 in Uganda’s Albertine basin, and will add 16 exploration wells to its 2006-07 exploration program.

Hardman Resources assets include exploration interests in Tanzania, Suriname, Guyane, and the Falkland Islands as well as Tiof and Tevet fields off Mauritania with future gas potential from eight contiguous blocks covering 58,500 sq km.

The enlarged group will hold more than 110 licenses in 21 countries, with Africa accounting for over 45% of the total.

For the 6 months ended June 30, Hardman Resources reported profits before tax of $31.1 million (Aus.) and net assets as at that date of $542 million (Aus.).

Statoil’s GOM deal

Statoil’s transaction is expected to close in early November. In addition, Plains E&P agreed to give Statoil a right of first negotiation for other deepwater gulf assets.

Statoil is acquiring a 17.5% interest in the Caesar discovery, operated by Shell Exploration & Production Co., and a 12.5% interest in the Big Foot discovery along with a 12.5% interest in Big Foot North prospect, both operated by Chevron Corp.

Caesar is 160 miles south of Houma, La., on Green Canyon Block 683 (OGJ, May 22, 2006, Newsletter). The Caesar well was drilled to 29,721 ft TD in 4,500 ft of water.

The Big Foot discovery, on Walker Ridge Block 29, lies in 5,000 ft of water about 225 miles south of New Orleans (OGJ, Aug. 7, 2006, Newsletter).

The new assets are in the Greater Tahiti area, where Statoil already was positioned.

The Caesar discovery is between the Chevron-operated Tahiti and Tonga discoveries, in both of which Statoil has a 25% interest. Tahiti is under development on Green Canyon Block 640 in 4,000 ft of water 190 miles southwest of New Orleans, and due to come on stream in 2008.

The Big Foot discovery is in the same geological trend as Tahiti and Caesar. Big Foot is in the Walker Ridge area, close to the Jack and St. Malo discoveries operated by Chevron. Statoil holds a 25% interest in Jack and 6.25% interest in St. Malo (OGJ, Sept. 11, 2006, Newsletter).