With Vastar, BP Adds Another Jewel to Crown
BP further has cemented its position as the top natural gas
producer in North America by acquiring the outstanding minority
interest in Houston-based independent producer Vastar Resources
BP already had owned 81.9% of Vastar's common stock as a result
of its merger with Atlantic Richfield Co. last April. It picked up
the remaining 18.1% interest, or approximately 17.7 million shares,
on Sept. 15 when Vastar's minority shareholders voted to accept the
London-based producer's offer of $83 per share. The deal was
valued at nearly $1.5 billion.
About 250 of Vastar's 1,100 employees are expected to lose their
jobs as the company is folded into BP, a BP spokesman in Houston
said. The rest will be offered positions either within BP or with
companies that perform outsourcing services for BP.
"The Vastar acquisition is a great strategic fit with our U.S.
upstream portfolio," said David H. Welch, BP's Houston-based vice
president for upstream operations. Specifically, it "strengthens
our oil and gas portfolio" in the Mid-Continent, Rocky Mountains,
Gulf Coast region, and in the Continental Shelf and deep-water
areas of the Gulf of Mexico.
At the end of 1999, Vastar's domestic reserves were pegged at
nearly 4.1 Tcf gas equivalent, and its average daily equivalent
production had reached a record 1.43 Bcf. BP's gas production in
the United States was posted at 3.2 Bcf/d in the second quarter of
Worldwide, BP said it hopes to achieve gas production of 8 Bcf/d
by the end of this year, and 9 Bcf/d by the end of 2001.
Vastar is the latest jewel in BP's crown, having acquired Amoco,
Arco and Burmah Castrol plc. It first announced its intention to
acquire Vastar last March upon completing its transaction to buy
Arco, which had held the nearly 82% interest in Vastar.
The corporate name, Vastar, will cease to exist, according to
the BP spokesman. Also, the London-based company will no longer be
called BP Amoco, he said, but instead will be known simply as BP.
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