ConocoPhillips to Acquire Burlington

Published Dec 16, 2005 12:01 AM by The Maritime Executive

ConocoPhillips, the third-largest oil and gas producer in the U.S., will pay $46.50 in cash and $45.50 in stock for each Burlington share, the company said. That's $92 a share based on the price of ConocoPhillips stock on Dec. 9th, before reports of the merger. The takeover is the industry's biggest since Chevron Corp. agreed to buy Texaco Inc. in 2001.

ConocoPhillips is trying to catch up with Chevron, the number two U.S. oil company, as oil and gas fields become harder to find and more expensive to tap. ConocoPhillips pumped more from reserves last year than it replaced through exploration. Half the crude oil the company produces is from older fields in Alaska and Norway, which yield less crude each year.

Energy experts say that acquiring Burlington will position ConocoPhillips in the league of ExxonMobil and BP. U.S. energy firms have agreed this year to spend more than $197 billion on acquisitions. That's double what they spent in 2004 and the most since 1999, when $202 billion in mergers were disclosed.

The ConocoPhillips and Burlington merger will make the company the second-largest U.S. gas producer behind BP.