The Federal Trade Commission (FTC) has given the green light to two producer mergers — EnCana Corp.’s and Kerr-McGee’s separate bids to buy Denver-based independent oil and gas producers. The transactions were announced within days of each other last month.

Calgary-based EnCana’s proposed $2.2 billion purchase (excluding $500 million in debt assumption) of Tom Brown cleared the Hart-Scott-Rodino waiting period on May 7, with the FTC imposing no restrictions on the deal.

The $48/share tender offer continues to be subject to other conditions outlined in the purchase agreement. The board of directors of Tom Brown has unanimously approved the merger agreement and recommends that shareholders accept the offer and tender their shares. Also previously announced, EnCana has received all necessary approvals under the Competition Act in Canada.

The merger will bring EnCana’s total U.S. natural gas production to 1 Bcf/d, including Tom Brown’s 325 MMcfe/d. Following the deal, EnCana — already considered to be the largest independent oil and gas producer in North America — plans to sell $1-$1.5 billion of Canadian conventional assets.

On the same day, the FTC granted Kerr-McGee’s bid for Westport Resources an “early termination” of the normal waiting period under the Hart-Scott-Rodino antitrust review, with regulators seeking no action.

Offshore pioneer Kerr-McGee is expected to become the fifth largest independent producer following its purchase of Westport Resources. The transaction will substantially expand the Oklahoma City-based producer’s land-based prospects, increasing its proved reserves 30% and also boosting its total daily production more than 34%, which will be weighted 54% to natural gas.

The combined companies will have about 1.3 billion barrels of oil equivalent (boe) of proved reserves, with most in natural gas and located in the United States. Last year, the two companies produced a combined total of 158,000 barrels/day and 842 MMcf/d of gas.

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