Newfield Exploration Co. said Tuesday that it has completed its merger transaction with EEX Corp. Under the $640 million deal first reported in May, EEX becomes a subsidiary of Newfield and will be named Newfield Exploration Gulf Coast Inc. (see Daily GPI, May 31). More than 98% of the common shares voted were in favor of the transaction.

“We are excited about closing this transaction and plan to quickly go to work on our new properties,” said David A. Trice, Newfield CEO. “With the addition of this acreage, Newfield will be one of the most active companies in South Texas. This acquisition balances our mix of onshore and offshore reserves and provides us with some high-potential drilling plays and prospects along the Texas Gulf Coast and in the Gulf of Mexico. We expect to double the current level of capital investment on EEX’s onshore properties in 2003.”

Newfield , already dominant along the Outer Continental Shelf, gained its first foothold in deeper water, picking up 68 lease blocks, most of which EEX was exploring with Shell Oil Co.

EEX, formerly the oil and gas exploration arm of Enserch, had been viewed as a strong takeover candidate after struggling in the wake of Enron Corp.’s bankruptcy. As EEX CEO Tom Hamilton explained, unfortunately the company had gone to the bond market to secure credit on Sept. 11, 2001. After the bond market closed that day, EEX had trouble renegotiating a new line of credit, and it owed Enron money. EEX was not given approval in time to meet the expiration date of its credit line by the U.S. Bankruptcy Court in New York, which is handling Enron’s case, and had been searching for a way to make its payments so that it could free up its substantial assets to secure a new line of credit.

In South Texas, Newfield will pick up 114,206 developed acres and 245,354 undeveloped acres from EEX, giving it a total pro forma estimate of 131,583 developed acres and 278,049 undeveloped acres — 409,635 total. In South Louisiana, EEX will add 542 developed and 29 undeveloped acres to Newfield ‘s asset base, giving it a total of 134,831 acres overall. Trice said EEX has 61 producing fields onshore, adding there were “significant” discoveries possible that may increase the reserve base.

Newfield Exploration is an independent crude oil and natural gas exploration and production company with interests in the Gulf of Mexico, along the U.S. Onshore Gulf Coast, in the Anadarko and Permian Basins, offshore Australia and in China’s Bohai Bay.

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