Conoco To Acquire Gulf Canada Resources

Conoco Inc. agreed to buy Gulf Canada Resources Ltd. for $4.3 billion in cash to dramatically boost its international oil and natural gas reserves. The Houston-based company will pay $8.06 a share for Gulf Canada and assume $2 billion in debt, preferred stock and minority interests.

Conoco’s natural gas reserves and production will rise by more than 50% in North America and more than double in Southeast Asia after the acquisition.

Any reduction in work force would be made through attrition and reduced hiring, the companies said.

Conoco said the purchase will raise its debt by more than a third. Chairman Archie Dunham said the company plans to reduce debt by $2.5 billion to $3 billion in the next 18 months, partly by cutting capital spending and suspending a share-repurchase plan.

In Big Board trading, shares of Gulf Canada, based in Calgary, Alberta, rose $1.99 to $7.91, and class B shares of Conoco closed unchanged at $31.40.