Privately-held Hunt Oil, based in Dallas, announced yesterday itis buying Calgary-based Newport Petroleum Corp. for C$5.50/share incash or about C$760 million, excluding C$271 in debt assumption.The offer represents a 10% premium over Newport’s closing shareprice of C$5 on the Toronto Stock Exchange on May 12. It hasunanimous support of Newport’s board and senior officers.

Newport CEO Uldis Upitis said the deal marks the “successfulconclusion to the process of identifying opportunities to enhanceshareholder value. The cash offer represents excellent value forthe company and provides liquidity for all shareholders. Newport islooking forward to working with Hunt to complete the acquisition ona timely basis.”

Hunt CEO Ray L. Hunt said the purchase is a significant steptoward Hunt’s objective of significantly expanding its scope ofoperations in Canada. “Newport provides Hunt with an excellentplatform for future growth in Canada.” Newport was founded eightyears ago and has experienced success as a western Canadian basedoil and gas exploration company.

The agreement provides that Newport will pay Hunt anon-completion fee of C$25 million in certain circumstances. Inaddition, Newport has agreed to close its data room, not to solicitfurther offers and to grant Hunt a right of first refusal withrespect to any subsequent offers.

The offering circular associated with the transaction isexpected to be mailed to Newport’s shareholders shortly, and theoffer will expire 21 days thereafter. It is conditional on, amongother things, at least two-thirds of Newport’s common shares (fullydiluted) being tendered, and receipt of all necessary regulatoryapprovals.

Hunt has had a presence in Canada since 1948 and conducts itsCanadian operations from Calgary. It also operates in the GulfCoast area of the U.S., in the Republic of Yemen and in Peru.

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