NEWS RELEASE
[GRAPHIC OMITTED - Company's Logo]
BURLINGTON
RESOURCES
To: Daily Papers, Trade Press For: Immediate Burlington Contacts:
Financial and Security Analysts Release Financial: John Carrara 713-624-9548
Ellen DeSanctis 713-624-9256
Media: James Bartlett 713-624-9354
Canadian Hunter Contacts:
Media: Steve Savidant 403-260-1849
Financial: Steve Soules 403-260-1006
Barb Stretch 403-260-1715
Burlington Resources Web site: www.br-inc.com BR0122
Canadian Hunter Web site: www.canadianhunter.com
BURLINGTON RESOURCES AGREES TO ACQUIRE
CANADIAN HUNTER EXPLORATION
FOR U.S. $2.1 BILLION IN CASH
Transaction strengthens opportunity portfolio and heightens emphasis
on returns-based investing and North American natural gas
Houston, Texas and Calgary, Alberta, Oct. 9, 2001 - Burlington Resources
Inc. (NYSE: BR) and Canadian Hunter Exploration Ltd. (TSE: HTR) today announced
that they have entered into an agreement pursuant to which Burlington will make
an offer to holders of the outstanding shares of Canadian Hunter to acquire all
such shares for cash consideration of CDN $53 per share, representing an
aggregate value of approximately U.S. $2.1 billion in cash (CDN $3.3 billion).
Canadian Hunter is one of Canada's most successful independent oil and gas
companies. The acquisition of Canadian Hunter enhances Burlington's stature as a
key player in the North American natural gas production business. It will almost
double Burlington's existing investment in Canada, and add a portfolio of
attractive producing properties characterized by low operating costs, long-lived
reserves and promising exploration and exploitation potential.
Burlington will gain estimated proved reserves of 1.2 trillion cubic feet
of natural gas and 6.2 million barrels of oil, along with approximately two
million net undeveloped acres and
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extensive seismic data. Burlington has allocated $228 million of the aggregate
purchase price to the undeveloped acreage and seismic data, and $250 million for
processing plants and other infrastructure. In 2001, Burlington expects Canadian
Hunter to average net production of 430 million cubic feet per day of natural
gas and 2,700 barrels per day of oil and condensate. All volumes are reported
using U.S. standards. Based on these data, Burlington's purchase cost equates to
$1.27 per thousand cubic feet equivalent (Mcfe) of proved natural gas reserves
and $4,640 per Mcfe of daily production.
The agreement was unanimously approved in special meetings of both
companies' boards of directors, and the transaction is expected to close later
in 2001. Merrill Lynch and Morgan Stanley acted as Burlington's financial
advisors, and committed U.S. $1.9 billion of the total financing for the
transaction. CIBC World Markets Inc. and Goldman, Sachs & Co. acted as Canadian
Hunter's financial advisors.
"The addition of Canadian Hunter's outstanding assets and highly talented
people represents a unique opportunity for Burlington," said Bobby S. Shackouls,
Burlington chairman, president and chief executive officer. "We have been
studying Canadian Hunter's assets for some time, and they are the right fit with
our North American natural gas strategy and our returns-based investing.
Canadian Hunter's combination of current production, outstanding long-range
potential, high working interests and its proximity to our own major production
in Canada make it a crown jewel."
"Over the past 28 years, Canadian Hunter has grown into one of the most
successful natural gas producers in Canada through its relentless pursuit of
value," said Steve Savidant, Canadian Hunter president and CEO. "Burlington's
offer reflects the extremely high quality of our team of people and our large
inventory of exploration and development opportunities in core areas in western
Canada and Argentina. I believe our two organizations have complementary assets
and skillsets, and together will create a combined entity with an even stronger
natural gas focus in North America."
"Burlington is a very strong exploration and production company that
recognizes the value in Canadian Hunter's elite people and assets," said James
K. Gray, Canadian Hunter's co-founder and chairman. "We were one of Canada's
first gas-focused exploration and production companies. Our discovery of the
Deep Basin in 1976 - a giant among North American gas fields - helped build our
company and establish Canada's modern natural gas industry. I am pleased that
our employees will be joining a company that values superior technical and
operational expertise, all of which Canadian Hunter brings. This transaction
works from the standpoint of our employees as well as our shareholders."
Burlington also announced that it intends to further high-grade its
portfolio by offering for sale certain existing properties that do not fit its
preferred asset profile. The company further disclosed that it would continue
its share buyback program, which is authorized to spend $1 billion on share
repurchases. Under this existing authorization, the company has spent nearly
$694 million to repurchase 16.3 million shares. "In recognition of the changing
industry
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environment, we will keep the repurchase authorization open, and continue to use
it appropriately," Shackouls added.
The acquisition offers these additional benefits to Burlington:
o Leadership in North American natural gas - The addition of Canadian Hunter's
assets enhances Burlington's position as a leading independent company in North
American natural gas production and reserves. The focus of both companies is
natural gas, which constitutes 97 percent of Canadian Hunter's reserves, and 80
percent of Burlington's reserves.
o Increased size and scale - Excluding the impact of asset sales, the addition
of Canadian Hunter's volumes represents nearly 20 percent of Burlington's 2001
expected full-year average natural gas equivalent volumes. Burlington estimates
that net of divestitures, its future production growth will average between 3
and 8 percent annually. Reserves, again excluding the impact of divestitures,
will expand by 12 percent to 11.5 trillion cubic feet of natural gas equivalent,
based on Burlington's year-end 2000 reserves and Canadian Hunter's current
reserves.
o Major field development exposure - Burlington will gain Canadian Hunter's
dominant position in Canada's Deep Basin, North America's third-largest natural
gas field, which is only partially developed. Canadian Hunter holds interests in
approximately 1.5 million acres in the basin, which features 17 major producing
horizons. It is similar to the San Juan Basin in the U.S., where Burlington has
utilized its conventional gas and coalbed methane expertise to become the
leading producer.
o Broad-based basin exposure - Canadian Hunter holds interests in a number of
other important producing areas in the Western Canadian Sedimentary Basin, among
them Border, Corridor, Kaybob, Ferrybank, Chedderville, Claresholm and
Lethbridge. Burlington already has contiguous production in many of these areas.
Burlington will host a meeting of investors and analysts today at 10:30
a.m. Eastern time at the St. Regis Hotel in New York to discuss this
transaction. The meeting will be accessible via Web cast (audio and presentation
materials) through Burlington's Web site, www.br-inc.com, or via an audio-only
dial-in teleconference at (888) 400-7918, with visual presentation materials
available for downloading from the Web site. A replay of the meeting will also
be available beginning at 3:45 p.m. (Eastern time) today through midnight Oct.
23, 2001. The replay can be accessed by telephone at (800) 475-6701 in the U.S.
or at (320) 365-3844 internationally. The access code is 607072. The meeting
replay is also archived on the Burlington Web site for the same time period.
Under the terms of the agreement the offer will be made by Burlington or
one of its subsidiaries. The offer will be conditional upon at least two-thirds
of the Canadian Hunter shares being tendered, on there being no material adverse
change in the business of Canadian Hunter, or there being no occurrence of
certain disaster events, and other customary closing conditions, including
receiving applicable regulatory approvals. The formal offer and take-over bid
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documents are expected to be mailed to Canadian Hunter's shareholders as soon as
practicable. The offer will expire 35 days thereafter, unless extended by
Burlington. Completion of the transaction is expected in late 2001.
Canadian Hunter's financial advisors have advised the board that the
consideration to be received by shareholders pursuant to the offer is fair, from
a financial point of view. Canadian Hunter's board of directors will recommend
that Canadian Hunter shareholders accept the offer. Additionally the board has
agreed to waive the application of the company's shareholders' rights plan
immediately before expiry of the offer. The agreement provides that Canadian
Hunter will pay to Burlington a non-completion fee of U.S. $54 million (CDN $85
million) in certain circumstances and further, that while Canadian Hunter has
agreed not to solicit further offers, the board of directors of Canadian Hunter
may respond to other offers in accordance with their fiduciary responsibilities,
subject to certain conditions.
Canadian Hunter is a Calgary based oil and natural gas producer, with
natural gas comprising approximately 97 percent of its production and reserves.
Additional information is available on the Canadian Hunter Web site at
www.canadianhunter.com. Canadian Hunter is listed on The Toronto Stock Exchange
under the symbol HTR.
Headquartered in Houston, Texas, Burlington Resources is one of the world's
largest independent oil and gas companies. The company has properties in the
U.S., Canada, the United Kingdom, South America, Africa and China. Additional
information is available on the Burlington Resources Web site at www.br-inc.com.
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FORWARD-LOOKING STATEMENT
This press release may contain projections and other forward-looking statements
within the meaning of Section 21E of the Securities Exchange Act of 1934, as
amended. Any such projections or statements reflect the Company's current views
with respect to future events and financial performance. No assurances can be
given, however, that these events will occur or that such projections will be
achieved and actual results could differ materially from those projected. A
discussion of important factors that could cause actual results to differ
materially from those projected is included in the Company's periodic reports
filed with the Securities and Exchange Commission.