Sep 20 2005
Hydro has announced that it will acquire Spinnaker Exploration Company in an all-cash transaction for USD 2.45 billion. The acquisition will substantially boost Hydro's presence and growth potential in the US Gulf of Mexico.
The acquisition of US-based Spinnaker Exploration will significantly raise Hydro’s international oil and gas production. Following completion of the acquisition, Hydro expects annual international production growth in 2005-2008 of approximately 40 percent. The transaction is expected to be earnings and cashflow accretive to Hydro.
Under the terms of the agreement, approved by the Board of Directors of both companies, Hydro will pay USD 65.50 per share in cash for all outstanding common shares and options of Spinnaker Exploration. In addition to the total purchase price for the shares of approximately USD 2.45 billion, Hydro will assume approximately USD 110 million in net interest-bearing debt. The acquisition is subject to approval by Spinnaker Exploration shareholders, and compliance with notification provisions of US antitrust laws and other customary regulatory approvals.
The transaction is expected to be completed in the fourth quarter of 2005.
New growth and value-creation
“The acquisition is an important breakthrough in Hydro’s international growth strategy,” said Eivind Reiten, Hydro President and Chief Executive Officer.
“The transaction will unlock new growth and value-creation opportunities for our shareholders. We believe that the deepwater potential in the Gulf of Mexico is considerable. Hydro’s industry-leading expertise in deepwater exploration and production, combined with Spinnaker’s unique skills and acreage position in the region, will enable us to develop these prospects profitably in a stable and attractive fiscal environment. I’m looking forward to integrating Spinnaker Exploration’s assets and world-class exploration and management team into Hydro’s operations.”
A significant player in developing the Gulf of Mexico
Spinnaker Exploration is an independent Houston-based energy company engaged in exploration, development and production of oil and gas, mainly in the Gulf of Mexico. It has about 80 employees in Houston, Texas, with an exceptional record – it has drilled 176 wells in the region with a 60 percent success rate. Spinnaker has an extensive seismic database covering most of the Gulf of Mexico and a portfolio with significant exploration acreage – both deepwater and deep-shelf prospects. It also has exploration positions in Nigeria.
Spinnaker Exploration’s portfolio contains a number of high-quality development projects. The total production is expected to reach about 50,000 barrels of oil equivalent per day (boed) by 2008. Spinnaker’s current production is about 23,000 boed, and expected total reserves are 129 million barrels.
http://www.hydro.com