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Cal Dive to Acquire Remington Oil & Gas

January 24, 2006|From Associated Press

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 & Gas Corp., which has holdings in the Gulf of Mexico.

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 deep water 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 deep water 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.

Most of Remington'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 would get $27 cash and 0.436 share of Cal Dive common stock for each of their Remington shares. At Cal Dive's closing stock price Friday, that equals $46.33 a share for Remington stockholders.

Shares of Cal Dive dropped $2.69, or 6%, to $41.64 on Monday; Remington shares jumped $6.84, or 18%, to $44.80.

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