Unocal, Tom Brown Finish Rockies Deal
Unocal Corp.'s Spirit Energy 76 unit completed the previously
announced trade of most of its Rocky Mountain oil and gas assets to
Tom Brown Inc (See Daily GPI March 11,
1999). Unocal received 5.8 million shares of Tom Brown common
stock (about 16.5%) and $5 million for the properties. The deal is
worth about $76 million. Subject to certain restrictions and
conditions, Unocal has the option to increase its stock ownership up
to 19.5% through open market purchases. The sale agreement also
entitles Unocal to nominate one director to the Tom Brown board.
Unocal said it expects the deal to be accretive to reserves and
production in the long-term as Tom Brown applies its aggressive
exploration and development activities to the Unocal assets. For
the short-term, the transaction will slightly dilute Unocal's
reserves and production.
Tom Brown received most of Spirit Energy's Rocky Mountain
assets. These include about 35 net wells that recorded first
quarter 1999 net daily production of 29 MMcf of gas, 239 barrels
of oil and 29,065 gallons of gas plant liquids. In addition, Tom
Brown received proved reserves of 89 Bcfe of natural gas and about
65,000 undeveloped acres in Colorado, Utah, Wyoming and North
The assets also include the Lisbon Cryogenic Processing Plant in
Moab, UT, one of only seven plants in the U.S. that produce liquid
helium. The effective date of the transaction was Jan. 1.
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