- The Washington Times - Monday, February 24, 2003

OKLAHOMA CITY, Feb. 24 (UPI) — Devon Energy Corp., an oil and gas producer, said Monday it has reached an agreement to acquire Ocean Energy Inc. for $5.3 billion.

When the deal is completed, the merged company will be named Devon Energy Corp. and will have its headquarters in Oklahoma City.

Under the terms of the agreement, Ocean's shareholders will receive 0.414 shares of Devon common stock for each common share of Ocean.

Based upon Devon's closing stock price of $48.23 a share on Feb. 21, the total value of the stock to be issued will be approximately $3.5 billion. The value of the transaction, including the assumption of Ocean's debt and other obligations, is approximately $5.3 billion.

The deal, which is expected to be non-taxable to the shareholders of both companies, is subject to approval by the shareholders of both companies as well as expiration of the Hart-Scott-Rodino waiting period and other customary closing conditions.

Both Devon and Ocean said they intend to hold special shareholders' meetings as soon as practicable following completion of regulatory review. Completion of the deal is expected in the second or third quarter of this year.

When competed, Devon will become the nation's largest independent oil and natural gas producer with production of approximately 650,000 equivalent barrels of oil per day, and will have an enterprise value of approximately $20 billion.

"Combining our two companies creates a balanced portfolio with North American and international assets, increased oil and gas production capabilities and greater internal growth opportunities through an active exploration program," said J. Larry Nichols, Devon's chairman, president and chief executive officer. "Ocean's high-impact, deepwater projects and complementary management skills make this a win-win transaction."

James T. Hackett, chairman, president and chief executive officer of Ocean, said, "This merger combines the strong North American portfolio of Devon with the growth profile of Ocean.

"As part of a much larger organization, our shareholders will benefit from the superior access to capital necessary to accelerate key exploration and development opportunities."

Following completion of the deal, Nichols will retain the positions of chairman and chief executive officer of Devon. Hackett will be named president and chief operating officer. The board of directors will consist of nine members from Devon and four members from Ocean.

The combined company will produce approximately 2.4 billion cubic feet of natural gas and approximately 250,000 barrels of oil and natural gas liquids per day. This will make Devon the nation's largest independent oil and gas producer. Devon will also have approximately 2.2 billion barrels of oil equivalent proved reserves, with 84 percent in North America.

Devon said 90 percent of its worldwide production will be from North America, of which 69 percent will be natural gas and the combined company worldwide will hold 29 million net undeveloped acres.

Sign up for Daily Newsletters

Copyright © 2019 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times welcomes your comments on Spot.im, our third-party provider. Please read our Comment Policy before commenting.


Click to Read More and View Comments

Click to Hide