Kerr McGee Selling Onshore U.S. Oil and Gas Fields to Devon
OKLAHOMA CITY (AP) _ Devon Energy Corp. is buying Kerr McGee Corp.’s North American onshore oil and gas fields for $297 million in stock, the companies announced Thursday.
The fields, which contain 53 million barrels of oil worth of proven oil and gas reserves, are located in West Texas, the Oklahoma and Texas panhandles, Rocky Mountains and western Canada. Devon also will get drilling rights to 370,000 acres.
Devon, which will pay for the fields with 9.95 million newly issued shares of its stock, already has properties in many of the same areas of the country.
``The locations of Kerr-McGee’s properties are so similar to Devon’s that we would expect to achieve operating efficiencies,″ said J. Larry Nichols, president and chief executive officer of Devon.
News of the deal lifted Devon’s stock 11 percent Thursday, up $3 to $29.87 1/2 on the American Stock Exchange. Kerr McGee was up 25 cents to $63.25 on the New York Stock Exchange.
The transaction is expected to be completed Dec. 31 and will give Kerr-McGee about 31 percent of the outstanding shares of Devon’s stock.
Luke R. Corbett, Kerr-McGee president and chief operating officer, said the move would allow his company to concentrate its exploration and production efforts in the Gulf of Mexico and overseas.
The transaction must be approved by a majority Devon shareholders. The boards of both companies have approved the transaction.