Tulsa-based Vintage Petroleum's board approves repatriation

Journal Record, The (Oklahoma City), Dec 28, 2005 by Journal Record Staff

Vintage Petroleum's board of directors approved a special one- time repatriation of $450 million from its international operations consisting of approximately $200 million in cash and $250 million of inter-company debt. The company expects to record additional income tax expense in the fourth quarter of approximately $50 million related to the portion of this repatriation which represents previously unremitted foreign earnings.

In connection with the company's evaluation of making a one-time repatriation of previously unremitted foreign earnings under the special provisions of the American Jobs Creation Act of 2004 (the Act), the company determined that, under its particular circumstances, the Act's mandatory reduction of foreign taxes eligible for credit against current and future U.S. taxes would be more punitive than the additional cash taxes to be paid currently if no election to be taxed under the provisions of the Act were made. Therefore, the company will not elect the partial dividend deduction provided for under the Act and thereby preserve an estimated $142 million of foreign taxes eligible to offset future U.S. taxes on foreign income in the next 10 years.

The company has received the necessary approval under the terms of its merger agreement with Occidental Petroleum Corporation for this one-time repatriation.