BP Amoco confirmed
, following a successful outcome to talks between the two companies, it has reached agreement to combine with the Atlantic Richfield Company
(ARCO) of Los Angeles.
The all-share transaction, approved by the boards of both companies, will involve the exchange of 0.82 BP Amoco American
Depositary Shares (ADS) for each ARCO share.
The deal will substantially boost BP Amoco's reserves and production, giving it the largest oil output of any non-state company, and will consolidate its position in Alaska where the resulting synergies and cost-savings are likely to increase the region's competitiveness and significantly encourage future investment.
Elsewhere, onshore the U.S. and the Gulf of Mexico, ARCO will add 360,000 boe to BP Amoco's daily output - half of it gas, chiefly from ARCO's 82 percent stake in Vastar, one of the most profitable operators in the Lower 48.