Global oil major ConocoPhillips has confirmed it is to acquire Burlington Resources for $35.6 billion in cash and stock.
ConocoPhillips said it would pay $46.50 in cash plus 0.7214 shares of its stock for each Burlington share, in a deal that would bring the third-ranked US oil company within striking distance from a revenue standpoint of the US number two, Chevron Corp.
Burlington's oil production is relatively small, but it is a major independent producer of natural gas, with output of nearly 1.9 billion cubic feet per day of natural gas during the most recent quarter.
Even as the price of crude oil has slipped from its post-Katrina highs, natural gas has continued to set new records, passing $15 per million British thermal units.
Burlington's shares, while off their post-Katrina all-time highs, were still up about 75 per cent for the year, with a 16 per cent rise in the preceding month alone.
Burlington's shares closed up $6.41 to $82.50 yesterday.