Oil, Gas Industry Continues Consolidation with Two Acquisitions

FAIRFIELD, Conn. -- As if falling prices weren't enough news coming out of the oil and gas industry affecting the U.S. economy, there also appears to be no let-up in the consolidation trend with the announcement of two more deals.

After more than a year of discussions, General Electric Co., Fairfield, Conn., agreed to pay $1.9 billion for oil services company Vetco Gray, a leading worldwide supplier of systems, products and services for onshore and offshore oil and gas drilling and production. The business is expected to general over $1.6 billion of sales in 2006, employs 5,000 people in more than 30 countries with key centers in Houston, Texas, Aberdeen, Scotland, and Stavanger and Oslo, Norway.

In a company release, GE said the acquisition "further strengthens GE's infrastructure portfolio and its ability to meet customers' needs around the globe."

GE's current oil and gas business has about 5,000 employees. The company's business had about $3.6 billion in revenue in 2005.

The transaction is expected to close in early 2007.

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The deal does not include Vetco Aibel which designs and builds oil and gas production plants. That company will continue to be owned by Candover Partners Ltd., 3i Group PLC and JP Morgan Partners LLC, GE said.

GE Oil & Gas' Claudi Santiago, chief executive offer said, "This acquisition enables GE to seize faster growth in a rapidly expanding global business."

In a second deal, Houston Exploration Co. reached an agreement to be acquired by Forest Oil Corp., Denver, for about $1.5 billion in cash and stock.

According to the Wall St. Journal, the deal apparently ends a shareholder fight over Houston Exploration's fate in the market.

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