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January
24, 2006 - January 23, 2006
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(Date
of Report - Date of earliest event
reported)
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KERR-McGEE
CORPORATION
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(Exact
name of registrant as specified in its
charter)
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Delaware
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1-16619
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73-1612389
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(State
of Incorporation)
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(Commission
File Number)
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(IRS
Employer Identification No.)
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123
Robert S. Kerr Avenue
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Oklahoma
City, Oklahoma
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73102
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(Address
of principal executive offices)
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(Zip
Code)
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(405) 270-1313
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(Registrant's
telephone number)
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Item
1.01
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Entry
into a Material Definitive Agreement
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On
January 23, 2006, Kerr-McGee Oil & Gas Corporation (“KMOG”), a wholly
owned subsidiary of Kerr-McGee Corporation (the “Company”), entered into
an Agreement and Plan of Merger (the “Agreement”) with W&T Offshore,
Inc. (“W&T”), pursuant to which KMOG agreed to sell substantially all
of the Company’s offshore U.S. Gulf of Mexico “shelf” oil and gas
leasehold interests and related assets to W&T through the merger of
W&T Energy V, LLC, a Delaware limited liability company and wholly
owned subsidiary of W&T, with and into Kerr-McGee Oil & Gas
(Shelf) LLC (“KMG Sub”), a Delaware limited liability company and wholly
owned subsidiary of KMOG. KMG Sub will be the surviving entity in
the
merger and will become a wholly owned subsidiary of W&T, and KMOG will
receive cash base merger consideration of $1,339,400,000.
W&T
has paid $25 million to KMOG as a performance deposit to be retained
by
KMOG unless the Agreement terminates due to a default by
KMOG.
The
Agreement has an effective date of October 1, 2005. Accordingly,
the
consideration to be received by KMOG is subject to adjustment based
on,
among other things, each party’s share of expenses incurred and production
proceeds received before or after (as applicable) October 1, 2005.
Further
adjustments to the merger consideration may be made due to environmental
defects, title defects or casualty losses or condemnation proceedings
related to the acquired properties if certain deductible amounts
are
exceeded.
Closing
of the transactions is subject to customary closing conditions, including
expiration or termination of the applicable waiting period under
the Hart
Scott Rodino Antitrust Improvements Act of 1976 and obtaining the
necessary consents from the applicable state authorities and the
federal
Minerals Management Service.
The
Agreement will terminate if the closing has not occurred by the earlier
of
September 30, 2006 and 90 days after the delivery of the notice by
KMOG
that necessary consents have been obtained. The Agreement is subject
to
termination by either party if the other party has not performed
certain
of its obligations under the Agreement if (i) such failure to perform
on
the part of KMOG would have a material adverse effect on the acquired
properties or KMG Sub’s assets and liabilities or financial condition
taken as a whole or (ii) such failure to perform by either KMOG or
W&T
would prevent or materially delay consummation of the
transactions.
Generally,
KMOG retains liability for, and indemnifies W&T against, claims
arising from operations before October 1, 2005. However, W&T will
indemnify KMOG against all (i) environmental liabilities (with certain
exceptions, including any third party claims for environmental liabilities
related to the property made against W&T within six months of the
closing of the transactions); (ii) plugging and abandonment liabilities
(excepting only fines and penalties, if any); and (iii) gas production
imbalances, in each case without regard to whether the liability
relates
to any period prior to October 1, 2005 or the condition of the property
at
the closing date.
With
certain exceptions, KMOG will not be obligated to indemnify W&T
against (i) any individual claims of less than $10,000 or (ii) for
aggregate liabilities in excess of 50% of the cash base merger
consideration.
In
addition, KMOG will repair, or reimburse W&T for the costs of repair
of, damages, if any, to the facilities included in the assets caused
by
Hurricanes Katrina and/or Rita, provided claims are properly supported
and
asserted within specified periods following the closing date.
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SIGNATURES
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Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
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KERR-MCGEE
CORPORATION
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By:
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(John
M. Rauh)
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John
M. Rauh
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Vice
President and Controller
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Dated:
January 24, 2006
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