Unocal Buying Large Stake in Northrock
Unocal Corp. subsidiary Unocal Canada Resources is buying a 46%
stake in Calgary-based Northrock Resources Ltd. for C$265 million
(US$175 million). The company has average daily gross production of
160 MMcf/d of gas and 11,000 b/d of crude oil and gas liquids and
holds net proved reserves of 35 million bbl of oil and liquids and
363 Bcf of gas. Northrock also has valued its exploration assets
(land and seismic) at C$132 million (US$88 million).
"The addition of the Northrock interest is a key element of our
North American gas strategy and will complement our already strong
natural gas base in the Gulf of Mexico region and the equity
position we are acquiring in Tom Brown, Inc., in the Rocky
Mountains," said Unocal Chairman Roger C. Beach. "At the same time,
the savings we realize by reinvesting the pretax proceeds from the
disposition of our Tarragon Oil and Gas Limited holdings enhance
the attractiveness of this investment." Marathon Oil acquired
Tarragon last year, including Unocal's Tarragon holdings.
Unocal Canada plans to acquire 10 million shares of Northrock
common stock at C$14 per share, representing 32% of all outstanding
shares. Northrock's board has agreed to support Unocal Canada's
tender offer conditioned on Unocal Canada obtaining at least 6.9
million shares of Northrock common stock. If the tender offer is
successful, Unocal will buy 7.6 million additional shares at C$16
per share, increasing its interest to as much as 46%.
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