Petrocan to buy Amerada Hess unit

April 8, 1996

Petro-Canada last week disclosed an agreement to pay $731 million (Canadian) to Amerada Hess Corp. for all shares of Amerada Hess Canada Ltd. Although the trade does not depend on financing, Petro-Canada plans to fund about half the purchase with a share offering to Canadian, U.S., and other investors. Amerada Hess pegged the price at $580 million (U.S.), broken out as $536.5 million plus closing adjustments estimated at $43.5 million. It expects closing before Apr. 30.

Petro-Canada last week disclosed an agreement to pay $731 million (Canadian) to Amerada Hess Corp. for all shares of Amerada Hess Canada Ltd.

Although the trade does not depend on financing, Petro-Canada plans to fund about half the purchase with a share offering to Canadian, U.S., and other investors.

Amerada Hess pegged the price at $580 million (U.S.), broken out as $536.5 million plus closing adjustments estimated at $43.5 million. It expects closing before Apr. 30.

With the acquisition, Petro-Canada's proved reserves in western Canada will jump 29% to 184 million bbl of conventional crude oil and liquids, while proved gas reserves will advance 25% to 2.585 tcf.

Production of conventional crude oil and liquids, again in western Canada, will increase 26% to 69,700 b/d. Gas production will increase 45% to 792 MMcfd. Oil and gas production is concentrated in West Central Alberta.

Undeveloped acreage in western Canada will increase 58% to 1.58 million acres.

All those figures are based on Petro-Canada's 1995 results, its estimate of Amerada Hess Canada's reserves, and Amerada Hess Canada operating data.

The trade does not cover Amerada Hess Canada's reserves of heavy oil and tar sands. The company said it has received bids and is negotiating for sale of those assets.