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ConocoPhillips Completes $35.6B Purchase of Burlington Resources

Houston-based ConocoPhillips reported Friday that it completed its $35.6 billion acquisition of independent producer Burlington Resources after receiving the go-ahead from Burlington's shareholders.

The stock-and-cash deal combines the third-largest integrated energy company in the U.S. with one of the world's largest independent exploration and production (E&P) companies, creating a leading natural gas producer in North America. ConocoPhillips had income of $13.68 billion in 2005, while Houston-based Burlington Resources reported earnings of $2.68 billion last year.

Based on estimates as of Dec. 31, 2005, ConocoPhillips said net proved reserves of the combined companies are expected to increase to 11.5 billion barrels of oil equivalent, including the company's interest in LUKOIL but excluding Syncrude.

As a result of the merger, each share of Burlington Resources common stock has been converted into the right to receive $46.50 in cash and 0.7214 shares of ConocoPhillips common stock. This represents a transaction value of $92 per share, based on the closing price of ConocoPhillips' shares on Dec. 9, the day the two companies reached the agreement to merge (see NGI, Dec. 19, 2005).

Based on the closing market prices for the shares of both companies on Dec. 9, the combined ConocoPhillips-Burlington Resources company will have an enterprise value of $135 billion ($106 billion of equity and $29 billion of net debt and preferred securities). Existing ConocoPhillips shareholders will own about 83% of ConocoPhillips, while Burlington Resources shareholders will own the remaining 17% of the new company.

Burlington Resources Chairman and CEO Bobby S. Shackouls and Steven J. Shapiro, executive president of finance and corporate development, were due to retire when the merger was concluded. Shackouls will join ConocoPhillips' board of directors. Randy L. Limbacher, Burlington Resources executive vice president and COO, now becomes executive vice president responsible for the company's North and South America E&P operations, reporting to ConocoPhillips Chairman and CEO Jim Mulva.

William B. Berry, formerly ConocoPhillips executive vice president of exploration and production, becomes executive vice president responsible for Europe, Asia, Africa and the Middle East, also reporting to Mulva.

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