Ocean Energy Divests $116 M of Assets to Reduce Debt
Ocean Energy Inc. (OEI) announced two separate sales worth a
combined $116 million and 164 Bcf of gas last week, as it carried
out a debt reduction plan aimed at preparing the company for its
merger with Seagull Energy. OEI said shareholders for both
companies are holding special meetings March 30 to vote on the
merger. If they vote in favor, the company will be officially
merged that afternoon.
The company sold its entire Canadian presence Friday when
Quintana Minerals Canada Corp., bought OEI's Canadian subsidiary
for $74 million. "This was a stock deal, and Quintana bought the
entire company," said Mike Aldridge, Ocean Energy's vice president
of corporate communications. "We have no other Canadian assets."
Earlier last week, Ocean Energy sold $42 million of Permian
Basin, Gulf Coast and Gulf of Mexico assets. Various buyers, who's
identity could not be disclosed, participated in the sale.
"Although the sale was substantial, we still have a strong presence
in these areas," Aldridge said.
"When we announced the proposed merger with Seagull, we said
that we would manage debt and raise capital through the disposition
of assets, with a target of $200 million in asset sales for the
combined company in 1999,'' said James C. Flores, Ocean Energy
president. "The $116 million of divestitures Ocean has announced,
coupled with $38 million Seagull announced recently, represents a
significant step toward achieving that objective and demonstrates
our commitment to debt reduction and the speed with which we are
implementing our business strategy."
Ocean Energy expects the sales to close by the end of April with
the remainder closing before May. Nesbitt Burns, Inc. acted as
financial advisor to Ocean Energy for the Canadian transaction.
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