Independents

A merger by Calgary-based independents Canadian Natural Resources Ltd. and Rio Alto Exploration Ltd. will create the fourth largest natural gas producer in North America in a deal valued at C$2.4 billion ($1.54 billion). As a result of the merger, Canadian Natural expects to produce between 1,500-1,560 MMcf/d in the second half of 2002. Canadian Natural’s natural gas exposure will increase to 55% of its total production base on a barrel of oil equivalent basis, while at the same time giving it natural gas development opportunities in a new core region in Northwest Alberta.

In a transaction worth about $118 million, two Oklahoma City-based independents, Chesapeake Energy Corp. and Canaan Energy Corp. plan to merge. Chesapeake, which already owns about $4 million of Canaan stock, said it would acquire the 4.5 million shares it does not own for $18 a share in cash and assume $33 million in debt. Canaan’s proved reserves, estimated at 100 Bcfe, are 91% natural gas, 74% proved developed, and are located almost exclusively in Chesapeake’s core Mid-Continent operating area.

XTO Energy Inc., Denbury Resources Inc. and Marathon Oil Corp. on Friday indicated they expect to keep production levels up this year, although investment in new opportunities may be delayed until commodity prices rise.

Kerr-McGee Corp., joining the trend among independents as the recession and lower energy prices take their toll, has reduced its capital spending budget for 2002 to $890 million — down from its $1.24 billion spending last year. Most of this year’s capital spending, approximately $780 million, will be spent on oil and gas exploration and production. The Oklahoma City-based company spent $1.03 billion on E&P in 2001.

Kerr-McGee Corp., joining the trend among independents as the recession and lower energy prices take their toll, has reduced its capital spending budget for 2002 to $890 million — down from its $1.24 billion spending last year. Most of this year’s capital spending, approximately $780 million, will be spent on oil and gas exploration and production. The Oklahoma City-based company spent $1.03 billion on E&P in 2001.

Texas independents Magnum Hunter Resources Inc. and Prize Energy Corp. announced Tuesday they had agreed to merge, creating a new company with a combined enterprise value of $1.2 billion. The companies, both headquartered in the Dallas area, had total proved reserves of approximately 1 Tcfe on Dec. 31, 2000 and at the end of September 2001, they had combined net daily production of 232 MMcfe. The company, which would have a reserve mix of 55% natural gas and 45% oil, would keep the Magnum Hunter name.

Texas independents Magnum Hunter Resources Inc. and Prize Energy Corp. announced Tuesday they had agreed to merge, creating a new company with a combined enterprise value of $1.2 billion. The companies, both headquartered in the Dallas area, had total proved reserves of approximately 1 Tcfe on Dec. 31, 2000 and at the end of September 2001, they had combined net daily production of 232 MMcfe. The company, which would have a reserve mix of 55% natural gas and 45% oil, would keep the Magnum Hunter name.

The $100 billion economic-stimulus bill narrowly approved by the U.S. House of Representatives last Wednesday contained a number of tax breaks and incentives designed to give a boost to independent oil and natural gas producers and producers of alternative energy.

The $100 billion economic-stimulus bill narrowly approved by the U.S. House of Representatives Wednesday contained a number of tax breaks and incentives designed to give a boost to independent oil and natural gas producers and producers of alternative energy.