Anadarko Petroleum Corp. enhanced its North American portfolio with an agreement to acquire Howell Corp. for $265 million cash, including debt of about $65 million. Howell, based in Houston, holds oil and gas reserves in Wyoming.

The acquisition was unanimously approved by both boards, and is expected to close late this year or early in 2003 following approval by a majority of Howell stockholders. Anadarko will pay the shareholders $20.75 per share, and holders of Howell’s $3.50 convertible preferred stock will receive $76.15 a share. Terms of the merger agreement will be included in proxy materials mailed to shareholders. On Friday, Howell’s shares closed at $13.55, below their 52-week high of $14.

Houston-based Howell had proved reserves of 45 MM boe at the end of last year, and its current net production is approximately 12,000 boe/d, primarily in the Salt Creek and Elk Basin fields in Wyoming. About 98% of Howell’s proved reserves are fully developed; 88% are oil.

Anadarko CEO John Seitz said the transaction would “fill an important niche in our overall project portfolio,” providing the Houston independent with “a lot of talent needed to expand our oil production in Wyoming.” He noted that Howell had an “excellent asset base in Wyoming, including the Salt Creek field, which we believe represents one of the largest remaining enhanced oil recovery opportunities in the Lower 48 states.” Anadarko already has a “significant natural gas exploration effort under way in that region.”

Richard K. Hebert, CEO of Howell, said the Anadarko deal would “greatly accelerate the creation of value,” and was “good news for our employees who will be a crucial resource as Anadarko aggressively pursues growth plans involving our Wyoming properties.”

In July, Howell announced the initial results of its USA #31 well in the Elk River Basin of Wyoming, which produced at a rate of 2 MMcf of 1,100 Btu/d at the end of the test period. The well, which Howell owns a 77.5% interest and 65% net revenue interest, encountered a total of 125 feet of net productive sand, and two of the zones had been tested to date at a total depth of 3,600 feet. Hebert said that the well is capable of producing more than 3.5 MMcf/d, 2.3 MMcf on a net interest basis from the Sundance and Morrison sands, which significantly increased Howell’s daily gas production. He said there was an “excellent chance” that several of the zones would be productive.

©Copyright 2002 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.