Shareholders of Canada’s Tarragon Oil and Gas Ltd. yesterdayapproved the indirect acquisition of their company by Marathon Oilfor an estimated $1.1 billion. Still, the final fate of the mergerwas up to the Ontario Court (General Division), which was expectedto issue a favorable decision either late Tuesday or today.
The acquisition of Tarragon, a Canadian oil/gas producer, “givesus an entree into western Canada, which is one of the big gasplays. We’re pretty well represented everywhere else in NorthernAmerica as far as gas is concerned. This is another piece in thepuzzle,” said Bill Ryder, a spokesman for Marathon Oil, which is aunit of Pittsburgh-based USX Corp.
The terms call for securityholders of Tarragon to receiveC$14.25 cash for each Tarragon common share or, at the option ofthe holder, 0.2814 exchangeable shares issued by Marathon CanadaOil Ltd., a wholly owned Canadian subsidiary of Marathon, that areexchangeable into shares of USX-Marathon Group common stock.
In May, when the deal was first announced, Tarragon’s productionwas estimated at 210 MMcf/d of natural gas and 2,100 barrels ofliquids. Its proved net reserves were 727 Bcf of natural gas, 55million barrels of light oil and natural gas liquids, and 84million barrels of heavy oil.
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