Union Pacific Resources Group (UPR) last week closed on the $2.6billion acquisition of Norcen Energy Resources, greatly increasingits production foothold in Western Canada, Latin America and theGulf of Mexico, including some deep-water prospects.

“While we currently have a presence in Canada and the Gulf ofMexico, this acquisition will make us a significant player in theseregions,” said George Lindahl III, UPR president (See NGI Feb. 2).

The companies’ boards approved the deal Jan. 26. UPR initiated atender offer for the 51.5% of Norcen’s stock not owned orcontrolled by Noranda Inc., a shareholder of 49.5% Norcen commonstock. Noranda had signed an irrevocable agreement to tender its49.5% of Norcen stock to UPR. In total, 95.5% of Norcen’s stock wastendered to UPR at the price of $13.65/share. UPR now owns about96.8% of the issued and outstanding common shares of Norcen on afully diluted basis. The deal’s overall value is $2.6 billion plusthe assumption of Norcen’s outstanding debt of about $900 million.

Norcen has properties in western Canada, the Gulf of Mexico,Venezuela and Guatemala. The company owns producing properties inArgentina and offshore Australia. Western Canada represents 62% ofNorcen proved reserves and 60% of production; the Gulf of Mexico,11% of proved reserves and 14% of production; Guatemala, 12% and12%; Venezuela, 13% and 11%; and other, 2% and 3%, respectively.UPR estimates Norcen proved reserves to be about 550 MMBoe.

Joe Fisher, Houston

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