Occidental Petroleum Acquires Altura Energy in $3.6 Billion Deal

Occidental Petroleum's recent acquisition of Altura Energy Ltd., a partnership owned by BP Amoco and Shell, marks a significant move in its efforts to boost output and earnings. The deal, worth $3.6 billion, will immediately increase Occidental's global output by 36% to 417,000 barrels a day and grow its worldwide proved reserves by 63% to 2.2 billion barrels. This strategic acquisition is expected to add 50 cents per share to Occidental's year 2000 earnings and will be closed in April.

Key Takeaways:

• Occidental Petroleum will acquire Altura Energy Ltd. in a $3.6 billion deal, increasing its global output by 36% to 417,000 barrels a day.
• The acquisition will grow Occidental's worldwide proved reserves by 63% to 2.2 billion barrels.
• Altura Energy Ltd. is a partnership formed in 1997 between BP Amoco and Shell Exploration and Production.
• Occidental will invest $1.2 billion to acquire common equity in the partnership and become the managing general partner controlling all of Altura.
• The remaining $2.4 billion will be raised through long-term notes issued by BP Amoco and Shell.
• Occidental expects the deal to add 50 cents per share to its year 2000 earnings.
• The acquisition is expected to be closed in April.

Statistics:

• Occidental's global output will increase by 36% to 417,000 barrels a day.
• Altura Energy Ltd. has proven oil equivalent reserves of 850 million barrels.
• Occidental's worldwide proved reserves will grow by 63% to 2.2 billion barrels.
• Occidental expects the deal to add $0.50 to its year 2000 earnings per share.
• Occidental paid $700 million for the sale of its equity interest in Canadian Occidental Petroleum.
• The remaining $500 million for the Altura acquisition will come from the sale of non-strategic assets.

Sources:

• Occidental Petroleum press release.
• Wall Street Journal.