Unocal, Tom Brown Complete 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 NGI March 15, 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.
Joe Fisher, Houston
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