Finance/Companies news briefs, Sept. 11
BG � Transco � Lattice Group � ExxonMobil ... Japan Guangdong LNG ... CLP Enterprises ... Rhodia Group ... Pechiney Group ... Solvay ... Saint-Gobain Group ... Gaz de France ... Baker Hughes � Schlumberger � Western GECO � Probex � Specialty Environmental Services � Pennzoil-Quaker State � Conoco � HoustonStreet Exchange � Sapient � Evergreen Resources � Enterprise Oil � TransCanada PipeLines � Oleoducto Central � Enbridge � Empresa Colombiana de Petroleos � and more
BG Group PLC announced the expected completion of its proposed demerger Oct. 23, assuming shareholder approval (OGJ, Mar. 27, 2000, p. 42). The name for the new holding company of the Transco group will be Lattice Group PLC following the demerger. The new company will include Transco, the regulated utility that owns and operates the majority of Britain's gas transportation system. This business will continue to be known as Transco. BG International will be known as BG Group PLC.
ExxonMobil Corp. has submitted an application, as part of a consortium, in response to the Guangdong LNG terminal and trunkline project competitive foreign partner selection process. The consortium comprises ExxonMobil China (Shenzhen) LNG Ltd.; Japan Guangdong LNG Co., whose shareholders Chubu Electric Power Co. Inc. and Nissho Iwai Corp.; and CLP Enterprises Ltd., a subsidiary of China Light & Power, a large Hong Kong utility company. The Guangdong LNG terminal and trunkline project is seeking foreign partner participation to conduct a feasibility study and build and operate an LNG receiving terminal and trunkline to supply natural gas to South China and Hong Kong. ExxonMobil says it believes the combination of the Chinese sponsors and its consortium is best positioned to develop China's first LNG terminal and related infrastructure.
Four of France's largest gas consumers�Rhodia Group, Pechiney Group, Solvay SA, and Saint-Gobain Group�are taking advantage of the Aug. 10 deregulation of the European Union natural gas market to join forces in calling for gas supply bids from a number of European gas companies, including Gaz de France. The four firms have a total of 19 sites, each of which consume more than 25 million cu m/year of gas. Together they account for 4% of France's gas consumption. By joining forces, they will take advantage of high volumes to obtain the best price. Gaz de France says it has already submitted its offer to the companies. The final choice will be made by yearend.
Baker Hughes Inc. has signed a definitive agreement with Schlumberger Ltd. to create a seismic venture to be called Western GECO. The agreement follows a memorandum of understanding signed in May (OGJ Online, May 31, 2000). The transaction is expected to be completed by yearend and is subject to regulatory approvals. Under the terms of the definitive agreement, which was approved by the Baker Hughes and Schlumberger boards, the venture would own the seismic acquisition assets, data processing assets, multiclient seismic libraries, and other assets of Western Geophysical and GECO-Prakla. Baker Hughes and Schlumberger would own, respectively, 30% and 70% of the venture.
Probex Corp. has agreed to purchase substantially all of the assets of Specialty Environmental Services Inc., a division of Pennzoil-Quaker State Co. Headquartered in Shreveport, La., SES provides collection and recycling services for used motor oil, oil filters, and fluids in 17 owner-operated facilities throughout the southeastern and south-central US.
Conoco Inc. and online energy trader HoustonStreet Exchange will form a joint venture to develop and market a web-enabled version of Conoco's automated mid and back-office applications to provide commercial support for oil trading. Sapient Corp. has been selected to assist in the early stages of this venture. The yet-to-be-named venture will develop technology based on Conoco's Crude Oil Information Network as well as other Conoco technologies created for refined products and the global energy market.
Shares of Evergreen Resources Inc. began trading on the New York Stock Exchange Sept. 8.
Enterprise Oil PLC issued redemption notices in respect of all of its 9.84% Series B Cumulative Dollar Preference Shares. The 5.1 million shares have an aggregate nominal value of $127.5 million, or $25/share. Redemption will occur Oct. 10. Enterprise will pay a premium, in connection with the early redemption of the shares, of 2% of the nominal value, or 50�/share. Accrued dividends to Oct. 9 of 14.76�/share (net of tax credit) will also be paid immediately before redemption.
TransCanada PipeLines Ltd. has closed the sale of its 17.5% interest in Oleoducto Central SA (OCENSA). TransCanada sold a 7.2% interest in OCENSA to Enbridge Inc. and a 10.3% interest to Empresa Colombiana de Petroleos (OGJ Online, May 4, 2000). In addition, TransCanada has closed the sale of its 50% interest in CIT Colombiana SA to Enbridge Inc. As previously announced, total proceeds from the sales is about $117 million (US).
Real Resources Inc., Calgary, successfully completed its offer to purchase all the outstanding common shares of Prism Petroleum Inc. At the offer expiry time Sept. 8, about 93.5% of Prism common shares had been tendered. Real intends to acquire all the remaining Prism common shares that were not tendered to the offer. The consideration for each Prism share is $1.85 (Can.) in cash, 0.50 Real common share, or a combination of cash and stock. The total consideration paid by Real for the Prism shares acquired to date is $9.8 million (Can.) in cash and 2.25 million common shares.
Delta Petroleum Corp., Denver, has entered into a new purchase and sale agreement with Saga Petroleum Corp. and its affiliates, giving Delta an option to purchase Saga's interests in 680 producing wells and associated acreage in the Permian basin for $49.5 million. The assets are in eight counties in West Texas and southeastern New Mexico. Delta has issued Saga 133,423 shares of its restricted common stock as payment for the option. If Delta exercises the option, it must make an additional deposit of $500,000 in cash and 289,583 shares of its restricted common stock on Oct. 2 and will be required to close and pay the bulk of the remainder of the purchase price by Dec. 1, 2000. Included in the potential acquisition is the operating entity, Saga Petroleum LLC, which operates 599 of the wells. The asasets involved produce about 1,750 boe/d, net to Saga. The properties also have substantial additional development potential that can be accessed easily and economically, says Delta. Delta has not yet secured the financing or industry participants necessary to acquire these properties.
Alberta Energy Co. Ltd., Calgary, announced that about 28 million Class A units of AEC Pipelines LP representing 87.5% of the partnership's outstanding units, were deposited and taken up pursuant to AEC's offer as of 7:00 p.m. Calgary time Sept. 7. AEC said that all of the conditions of its offer were satisfied. The firm has extended the offer until 7:00 p.m. Sept. 19 to permit remaining units to be tendered to the offer. If holders of more than 90% of the outstanding Class A units accept the offer, AEC will effect a compulsory acquisition of any remaining units, according to the provisions of the partnership agreement. Each unit tendered was purchased for 0.1552 AEC common share.
Tosco Corp. has completed the purchase of the Alliance refinery in Louisiana from BP (OGJ Online, July 14, 2000). The purchase price was $660 million, plus hydrocarbon inventories. The refinery, one of the newest in the US, is a modern, 250,000 b/d clean fuels and petrochemical complex.
Occidental Chemical Corp. has signed a nonbinding letter of intent with Sumitomo Bakelite Co. Ltd. Under which Sumitomo will acquire Occidental's Durez phenolic resins and compounding business and assets. Included in the proposed sale are manufacturing facilities at Niagara Falls, NY; Kenton, Ohio; Fort Erie, Ont.; and Genk, Belgium. The transaction is part of Occidental Petroleum Corp.'s previously announced program to focus its chemical division on its core chlor-alkali and vinyls businesses and reflects Sumitomo Bakelite's intention to expand its worldwide business to North America and Europe. Completion of the transaction is subject to the signing of a definitive agreement and regulatory review.
Canada's K2 Energy Corp. has raised $1 million dollars from US-based investors and has commenced a 10-well drilling program on two of its licensed properties on the Blackfeet Indian Reservation in northern Montana. The first three wells will be drilled in the Triangle Zone; the other seven wells will be drilled in the producing Kye Trout oil field. Subject to weather, all 10 wells are anticipated to be drilled and completed by early December. The financing was done through a private placement involving the sale of 2,439,375 units at a price of $0.32 (US)/unit and 662,000 units at a price of $0.47 (Can.)/unit. Each unit consists of one common share of the company and one common-share purchase warrant entitling the holder to purchase one common share at $0.50 (Can.)/share for 18 months from the date of issuance.