US energy firms in $21bn merger

Energy firms see huge resources in Colorado

Three of the largest US oil and gas exploration firms are merging in deals worth a combined $21bn (£11.6bn).

Anadarko Petroleum Corporation is to buy Oklahoma-based Kerr-McGee for $16.4bn, while separately acquiring Western Gas Resources for $4.7bn.

Kerr-McGee holds extensive oil and gas deposits in Colorado, Utah and offshore in the Gulf of Mexico while Western Gas Resources owns gas fields in Wyoming.

Energy firms are merging to absorb the huge costs of research and exploration.

The two deals - which must be approved by each firm's shareholders - should be completed by the autumn.

Anadarko said the deal would create a market leader in exploration in the deepwater Gulf of Mexico and the Rockies, two of the US fastest-growing oil and gas production regions.

"Kerr-McGee's outstanding deepwater holdings and skill sets will elevate Anadarko into the top echelon of deepwater operators," said Anadarko's chief executive Jim Hackett.