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With its chemicals unit spun off, and asset sales on track, Kerr-McGee Corp. continues to make significant progress in becoming a pure play exploration and production company, a company executive said Tuesday. The producer also remains on track to hit its fourth quarter production target of 248,500-277,200 boe/d.
Rick Buterbaugh, vice president for corporate planning, told analysts during a conference call that the company has now closed transactions for more than 74% of its projected asset sales, including North Sea assets, and it is evaluating bids for its Gulf of Mexico shelf properties. Also on Tuesday, the company's titanium dioxide unit Tronox Inc. debuted on the New York Stock Exchange. The initial public offering of the chemical unit is expected to fetch Kerr-McGee about $800 million.
Storm damage from Hurricanes Katrina and Rita continues to affect the producer's Gulf output, but Buterbaugh said most of the hold up now relates to repairs of third party infrastructure. Kerr-McGee has 85% of its pre-Katrina production volumes ramped up, or about 110,000 of 130,000 boe/d. He reaffirmed the fourth quarter oil and natural gas production forecast, but noted it would probably be on the low end of guidance because some deepwater projects and several Gulf fields remain shut in.
"This projection incorporates our current expectations for recovery of production currently being deferred in the Gulf of Mexico and along the Gulf Coast as we await hurricane-related repairs to pipelines and third party-related infrastructure," Buterbaugh said.
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