Offshore pioneer Kerr-McGee Corp. said its stockholders and those of Denver-based Westport Resources Corp. on Friday overwhelmingly approved the merger of the companies during special meetings of each company.

The $3.4 billion transaction, which was approved by the Federal Trade Commission in May, is now complete, making Kerr-McGee the fifth largest independent oil and natural gas producer, the company said.

Kerr-McGee said its executive management team members will continue in their current roles, and the company will retain the name Kerr-McGee, maintaining its headquarters in Oklahoma City, OK. The company’s oil and gas operations will continue to be based in Houston, TX, with primary regional offices in Denver; Dallas; Aberdeen, Scotland; and Beijing.

The combined company’s workforce will be scaled back by approximately 150 positions, according to Kerr-McGee. Once this is done, the company said it will have about 1,400 Kerr-McGee oil and gas employees worldwide.

The transaction substantially expands Kerr-McGee’s land-based prospects, increasing its proved reserves 30% and also boosts its total daily production by more than 34%, which will be weighted heavily towards natural gas. Kerr-McGee also will have about 1.3 billion barrels of oil equivalent (boe) of proved reserves, with 57% of the total in natural gas. Nearly 76% of the reserves would be located within the U.S.

“The additional properties [resulting from the merger] have a probable and possible resource potential of 1.8 Tcf of natural gas equivalent, and more than 2,500 low-risk, proven undeveloped, probable and possible drilling locations already are identified,” said David Hager, Kerr-McGee’s senior vice president for oil and gas exploration and production.

He noted that Kerr-McGee’s daily production is projected to range from 355,000 to 370,000 boe in 2005.

The company said it is increasing its estimated 2004 capital program for oil and gas operations to $1.1 billion from $900 million, and its exploration expense to $340 million from $300 million, to reflect six months of combined company operations. As a result of the merger, Kerr-McGee reported it expects to reduce its total debt as a percent of capitalization to approximately 42% by year-end.

Under the terms of the deal, Westport stockholders received 0.71 shares of Kerr-McGee common stock for each common share of Westport. Kerr-McGee issued approximately 49 million new shares to Westport’s stockholders and has a total of about 150 million shares outstanding.

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