ENERGY

Wednesday, June 11, 2008

ENERGY

XTO to Buy Hunt Petroleum

XTO Energy agreed to acquire Hunt Petroleum for $4.2 billion, ending the 83-year run of a company founded by the late billionaire H.L. Hunt.

XTO, the U.S. natural-gas producer that has made more than two dozen acquisitions since 2000, will pay $2.6 billion in cash and $1.6 billion in stock. Most of Hunt's wells are in East Texas and Louisiana, where XTO is a leading gas producer.

The deal will allow XTO to buy Hunt at less than $4 per thousand cubic feet of gas reserves. That's one-third current U.S. prices for a fuel that has risen even faster than crude oil this year. Hunt family heirs are selling out after crude surged to a record above $135 a barrel and gas futures jumped 67 percent in 2008.

Oil Prices Fall on Revised Forecast

Oil prices fell, giving up an earlier advance as the dollar held its gains against the euro and the Energy Department decreased its oil consumption projections. The nationwide average price for retail gasoline rose to a new record of more than $4.04 a gallon.

The Energy Department indicated that high prices were cutting oil consumption more than expected in the industrialized world. Consumption is expected to fall by 240,000 barrels a day in 2008; last month, the department forecast consumption would be unchanged from 2007 levels.

REAL ESTATE

Calpers May Trim Land Holdings

The California Public Employees' Retirement System, the largest U.S. public pension fund, may sell part of its $2 billion in residential land holdings after the investments lost 31 percent last year amid falling home prices and forecasts of further declines.

Calpers hired Morgan Stanley to review seven land deals it made with joint-venture partners and real estate advisers, fund spokeswoman Pat Macht said. The fund may decide to sell some of the land, purchased to develop new homes, or renegotiate partnerships.

The fund's entire real estate holdings, including apartments, offices and industrial buildings, were valued at $23.5 billion at the end of 2007 and earned 8.1 percent after expenses, according to Calpers investment committee documents.

AUTOMOTIVE

Ford Offer Draws Big Response

Ford investors flocked to Kirk Kerkorian's offer to buy 20 million additional shares of the company, a move that will help the billionaire investor increase his stake in Ford to about 5.5 percent.

Kerkorian's Tracinda said its tender offer of $8.50 a share drew overtures of more than 1 billion of the company's shares, or nearly half of Ford's outstanding stock. Tracinda will buy 20 million shares for about $170 million.

TECHNOLOGY

IPhone Buyers Can Trade Up

AT&T said customers who bought Apple's iPhones at its stores on or after May 27 could exchange the handset for the faster, cheaper new model and get some money back.

Apple said it would offer two new versions of the iPhone on July 11. Each costs $200 less than its predecessor. Customers would get a refund for the price difference, minus a 10 percent restocking fee, a spokesman for AT&T said.

CONTRACTING

Guilty Plea in Bribery Scheme

A retired Army lieutenant colonel has pleaded guilty to steering a contract to build warehouses in Iraq to a contractor in return for $4,000 cash and a $5,000 trip to Thailand.

Levonda J. Selph pleaded guilty in federal court to bribery and conspiracy in a plea bargain with the government in which she agreed to cooperate with the investigation. The contracting firm involved was not identified in court papers. She also agreed to pay the government $9,000 in restitution and serve a prison term set by the court.

The government said that in 2005 Selph served in Baghdad as head of a board that picked the winner of an annual $12 million contract to build and operate Defense Department warehouses.

LEGAL

Convicted Fund Manager Missing

Law enforcement officials are searching for a former hedge fund manager who cheated investors out of more than $400 million and once considered suicide, after finding his car on a New York bridge, police said.

Police began to suspect that Samuel Israel III might have killed himself to avoid a 20-year prison sentence after he failed to turn himself in at the prison outside of Boston and his abandoned vehicle was found on the Bear Mountain Bridge, which crosses the Hudson River at its deepest point. The words "Suicide is Painless" were etched onto the vehicle.

However, after more than a full day of searching for a body, police had found nothing, prompting the U.S. Marshals Service to launch its own search for Israel, police said.

Prosecutors said he and two other men persuaded investors to put $450 million into the Stamford, Conn.-based company by announcing nonexistent profits and providing fake audits.

Compiled from reports by Washington Post staff writers, the Associated Press, Reuters and Bloomberg News.