Finance/Companies news briefs, July 3

Vermilion Resources � Big Sky Resources � Methanex � Sterling Chemicals � BP Amoco Chemicals � Phillips Petroleum � Chevron � Kuwait Petroleum Corp. � Santa Fe International � ENI � Petroleos e Gas de Portugal


Vermilion Resources Ltd., Calgary, agreed to buy all outstanding shares of Big Sky Resources Inc., whose principal asset is a natural gas producing property. The property includes 68,000 acres of land in the Mastin Lake area, south of Edmonton, and a 27% holding in a gas plant. Big Sky's production is about 9 MMcfd of gas and 120 b/d of light crude. The transaction is worth about $33.2 million, including $8.4 million of assumed debt. The directors of both companies have approved the proposed transaction, and the directors of Big Sky will recommend the offer to their shareholders. The offer is conditional on the acquisition of two-thirds of the Big Sky shares. Big Sky has agreed to pay a termination fee of $1 million under specific circumstances.

Methanex Corp., Vancouver, has made a production agreement with Sterling Chemicals Inc. that gives it exclusive rights to output from Sterling's methanol plant in Texas City, Tex. Methanex entered a separate agreement with BP Amoco Chemicals to fulfill their methanol requirements in Texas City and the Houston area. The Canadian company said because of current high gas prices in the US Gulf of Mexico, it has decided to shut down Sterling's Texas City methanol plant for at least 6 months.

Phillips Petroleum Co. and Chevron Corp. have combined their worldwide chemicals businesses into a 50-50 joint venture, as planned in February. They have received the final necessary regulatory clearance. With more than $6 billion in assets, Chevron Phillips Chemical Co. will be one of the world's top producers of olefins, polyolefins, aromatics, and styrenics. On a pro forma basis, revenues for the combined businesses for 1999 would have been nearly $6 billion.

State-owned Kuwait Petroleum Corp. (KPC) has begun selling 34.5 million shares in Santa Fe International Corp. at $34.50/share, it was reported. The Kuwaiti News Agency quoted a company statement as saying that the firm would earn $1.03 billion to $1.19 billion from the public offering of about 26% of KPC's stake in Santa Fe, reducing its equity to 38.6%. In June 1997, KPC sold some 35 million shares at $28.50/share to finance investments at home. Santa Fe International, registered in the Cayman Islands, has 27 offshore rigs, 33 onshore rigs, and provides other services to drilling operations.

The European Commission authorized ENI SPA to acquire a 33.34% interest in the energy holding company Galp Petroleos e Gas de Portugal (GALP) through ENI affiliates AgipPetroli, Snam, and Italgas, said GALP. In January, ENI proposed to acquire an 11% interest in GALP from the Portuguese state and a 23.34% interest from investor group Petrocontrol. Also, Petrocontrol will sell its remaining 11% interest in GALP to Electricidade de Portugal, and the Portuguese state will sell another 4% stake in the company to Iberdrola Energia SA. Portugal will receive 434 million euros for the sale of its GALP stakes. After all these transactions, stakeholders in GALP will be the government of Portugal, 48.31%; ENI, 33.34%; power generator EDP, 14.27%; Iberdrola, 4%; and regional gas distributors, Portgas and Setgas, 0.04% each.

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