Kerr-McGee Corp. moved closer toward becoming a pure-play oil and natural gas producer after completing the initial public offering (IPO) of its chemicals unit, Tronox Inc. Combined with recent asset sales, the Oklahoma City-based explorer used the proceeds to pay off $4.25 billion in loans issued earlier this year, dropping its debt to $2.6 billion. Kerr-McGee received $800 million from the completion of the IPO of Tronox's Class A common stock and related debt financing transactions, and it will continue to control ownership through Class B common stock. The producer plans to consolidate the results of Tronox, including Tronox's debt of $550 million, in its financial statements, until the expected distribution of the remaining shares to Kerr-McGee shareholders in 2006 through a spin off or split off. Kerr-McGee said it continues to evaluate bids relating to the sale of its Gulf of Mexico shelf properties. Once the offshore assets are sold, more than 95% of its oil and gas reserves will be located in the United States, with 60% in gas. The company expects to increase production at a compound annual growth rate in the range of 5-9% through 2007.
Houston-based Enterprise Products Partners LP is more than doubling brine storage capabilities to expand its natural gas liquids (NGL) and petrochemical storage services at the Mont Belvieu, TX facility. Enterprise, which currently owns and operates 94 million bbl of usable NGL storage capacity at Mont Belvieu, will increase its brine storage capabilities to 19 million bbl from the current 9 million, said spokesman Randy Burkhalter. Besides more storage capacity, Enterprise plans to drill two new brine production wells. The two projects are expected to be in service next year, and Enterprise expects increased revenues from its storage services business beginning in the second half of 2006.
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