$3.2 billion buys a lot of gas and oil
30 Jan 2002
Petro-Canada has agreed to acquire the international oil and gas operations ofVeba Oil & Gas from Veba and BP for Cdn $3.2 billion in cash.
Veba's production and exploration interests are concentrated in three regions: the North Sea, North Africa, and Northern Latin America. Veba produces about 175,000 barrels of oil equivalent per day and has proven oil and gas reserves of almost 600 million barrels of oil equivalent.
Veba's North Sea assets include interests in the Guillemot and Scott fields in the UK and in the Hanze field in the Netherlands, production in Norway, and exploration interests in Denmark and the Faroes. Veba also has production in Libya and Syria.
In Latin America, Veba has an interest in the Cerro Negro integrated heavy oildevelopment in Venezuela, as well as an interest in an offshore natural gas development in Trinidad.
The acquisition of Veba will be accretive to Petro-Canada's earnings and cash flow. The acquisition immediately increases Petro-Canada's production andtotal proved reserves by over 70%, and over the next five years, Petro-Canada's production is expected to more than double from the 2001 level.
The purchase price of Cdn $3.2 billion is subject to closing adjustments and transaction costs. The assets will be acquired in an all-cash transaction, facilitated by committed credit facilities which Royal Bank of Canada and Deutsche Bank AG, Canada Branch have agreed to underwrite. It is expected that the deal will close in stages over a period running from May through September 2002.
