Good Morning, Bob....
From the WSJ Online:
Feb 13,2001
Anadarko Agrees to Buy Berkley
For $770 Million, Debt Assumption
By Thaddeus Herrick
Staff Reporter of The Wall Street Journal
Anadarko Petroleum Corp. agreed to buy Canada's Berkley Petroleum Corp. for $777 million in cash and the assumption of $250 million of the company's debt, topping an unsolicited bid from Hunt Oil Co.
Anadarko, an oil and natural-gas concern based in Houston, said it will pay $7.55 for each Berkley share, equal to about 11.40 Canadian dollars a share. Berkley closed on the Toronto Stock Exchange at 11.31 Canadian dollars (US$7.49), up nine Canadian cents.
The deal comes after Hunt Oil of Dallas bid for the Canadian natural-gas producer late last year, offering about $667 million. Hunt, which owns nearly 10% of Berkley, Calgary, Alberta, said it hasn't yet decided how it will react. Its offer of about C$10 a share was extended until Feb. 15, a spokesman for the company said. "Between now and Thursday we'll be studying the options available to us," said Jim Oberwetter, a Hunt spokesman.
The move underscores the attractiveness of Canadian natural-gas assets. Because of rising demand and flat production, industry analysts expect North American gas prices to remain strong for up to two more years.
This makes Canadian natural-gas producers, whose stocks have been relatively undervalued, attractive takeover targets, and U.S. energy companies have been snapping up their Canadian counterparts.
Just last week, California power company Calpine Corp. agreed to acquire Canada's Encal Energy Ltd., mainly to line up natural-gas reserves for power plants that supply electricity to California.
Acquiring Berkley would "fast track our Canadian strategy by about three years," said Anadarko spokeswoman Teresa Wong. Ms. Wong said Anadarko has been aggressively acquiring Canadian assets, including reserves with its purchase of Union Pacific Resources last year.
Berkley would give Anadarko 4.7 million acres in Canada of both developed and undeveloped gas fields, including plays in northeastern British Columbia, the Alberta foothills and the Northwest Territories.
The boards of both Anadarko and Berkley approved the deal, which is expected to close in mid-March, Anadarko said.
Write to Thaddeus Herrick at thaddeus.herrick@wsj.com
MY RESPONSE:
Dear Mr. Herrick...
The real story underlying the recently announced takeover is the Berkley California properties(East Lost Hills), located 45 miles outside of Bakersfield CA. This deep well gas play is in the back yard of California's energy crisis, located within 100 miles of ten new natural gas fired power plants under construction, currently producing one well at 13 MMCF/day at a spot price of $12-$18 per MCF!!
The areal extent of this play most likely covers 5 TCF of gas with probability of 5TCF more. Yet Andarko places no value on this property. In one week of production this well has generated over $1.2 million in revenue for the Joint Venture partners, 16% APO being Berkley's share. Listen to the conference call yesterday, beginning with Andarko's president's freudian slip at the outset which states " we place no value on assets outside of California"!! (of course he meant to say Canada!)
In conclusion check out the conference call, dig into the largest natural gas find in Continental US onshore history and see for yourself what geniuses Andarko have in acquiring this worthless California property!
Conference Call: stockhouse.com*-Cust=PRM-*-DID=488560-*-PassCode
For user and affiliation just type anything in. For the record I own no BKP stock but do enjoy a rather hefty number of shares of the other Joint Venture partners. Keep up the good work in continuing to inform the American investment community about Andarko's hidden gem.
Stephen |
