Better power and more gas
15 May 2001
Kerr-McGee Chemical announced yesterday that it has joined forces with Hydro-Quebec, Canada's largest electric company, to optimise and market a unique, solid-state lithium metal polymer power cell in a 50/50 joint venture that will be called Avestor Corporation.
The joint venture will commercialise a power cell capable of serving the telecommunication, utility peak shaving, and electric and hybrid-electric vehicle markets.
The initial target market for the new lithium metal polymer based system will be for backup power storage for telecommunication, cable and Internet applications.
Kerr-McGee also announced the same day that it had signed a definitive agreement with HS Resources to acquire all of the outstanding shares of HS Resources in a transaction valued at $1.7 billion, including the assumption of approximately $450 million of debt.
The agreement, unanimously approved by boards of directors of both companies, provides that Kerr-McGee will pay $66 for each share of HS Resources' common stock. The payment consists of 70% cash and 30% Kerr-McGee common stock that will be issued at a fixed exchange ratio of .9404 share for each share of HS Resources' common stock.
Through this transaction, Kerr-McGee will acquire proved reserves of 1.3 trillion cubic feet of natural gas equivalent, at a cost of approximately $1.10 per thousand cubic feet of proved gas equivalent, and gas gathering, undeveloped acreage and other assets valued at approximately $300 million.
The acquired reserves, which are predominately natural gas located in the Denver-Julesburg Basin of northeastern Colorado, will increase Kerr-McGee's proved US natural gas reserves by 77% and increase the company's reserve life for U.S. natural gas by about two years. Kerr-McGee's total proved reserves will increase by 20%.
