Cal Dive to buy Remington Oil and Gas
DALLAS – Energy-services provider Cal Dive International Inc. stepped up its shift into production Monday by agreeing to pay $1.4 billion for Remington Oil and Gas Corp., which has holdings in the Gulf of Mexico.The price, in cash and stock, represented a 22 percent premium over Remington’s closing stock price Friday.In afternoon trading, shares of Cal Dive fell $2.33, or 5.3 percent, to $42 on the Nasdaq Stock Market, while Remington shares jumped $6.80 or 17.9 percent, to $44.76 on the New York Stock Exchange.The deal continued a trend of consolidation in the energy industry, as high oil and gas prices have raised the value of companies and stoked the appetite of acquirers.Cal Dive’s chairman and chief executive, Owen Kratz, said the deal would give his company access to deepwater oil and gas reserves and the means to extract them.Houston-based Cal Dive builds and runs offshore platforms and pipelines in the deep areas of the Gulf of Mexico, the North Sea and the Asia-Pacific region. It also helps other companies drill and operate underwater wells.Cal Dive bought oil and gas properties in the deepwater Gulf last year from Murphy Oil Corp. and has made other, smaller acquisitions. Cal Dive earned $122 million on $698 million in revenue in the 12 months ended Sept. 30.At the end of the year, Remington had proved reserves equal to about 280 billion cubic feet of gas and has identified other potential areas, the companies said. Most of the company’s operations are in the Gulf of Mexico and along the Texas and Mississippi coasts.Remington earned $84 million on revenue of $277 million in the 12 months ended Sept. 30.Shareholders of Dallas-based Remington will get $27 cash and 0.436 shares of Cal Dive common stock for each of their Remington shares. At Cal Dive’s closing stock price on Friday, that equals $46.33 per share for Remington stockholders.Cal Dive said its total net cost would be reduced at closing by about $2 per share by the amount of cash that Remington is expected to have on its balance sheet.The deal, which needs approval by regulators and Remington shareholders, is expected to close in the second quarter. Cal Dive said it would maintain Remington’s office in Dallas.