Equitable Resources combined its Gulf of Mexico exploration andproduction unit with Westport Oil and Gas Co., a privateDenver-based exploration company. Equitable will receive about $50million in cash and a large minority interest in Westport.Equitable also will name three representatives and nominate afourth to the Westport board, bringing Westport’s board membershipto nine.

“We believe that Westport, with its size, balanced portfolio,and an outstanding shareholder-oriented management team led by DonWolf, is a prime candidate to access the public equity markets inthe near future,” said Murry S. Gerber, Equitable CEO.

Equitable will use the cash proceeds to help finance its recentacquisition of Statoil Energy Inc.’s Appalachian assets (see DailyGPI, Jan. 5) and for possible sharerepurchases. Equitable expects to reflect its investment in Westportusing the equity method of accounting.

Westport has gas and oil production in the Rockies, Midcontinentand Gulf Coast and was formed in 1991 by a European investment firmthat will continue to have a significant ownership stake. WestportCEO Don Wolf will retain his position and will remain a member ofWestport’s board.

As a result of this transaction, which is expected to close inApril, Westport will have approximately 430 Bcfe proved reservesand 68 Bcfe annual production. The company will have a combinedreserve life of 7.2 years and will be equally balanced between oiland gas. Westport’s reserves will be entirely located within theUnited States, with 60% onshore and 40% in the Gulf of Mexico.Westport’s Gulf of Mexico operations will be run from Houston, thepresent headquarters of Gulf operations for both Westport andEquitable.

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