As part of its portfolio rationalization effort, Texaco saidlast week that it has agreed to sell $161.1 million worth ofsouthwestern and Midcontinent properties to Bargo Energy. Theeffective date of the purchase was Jan. 1, 2000 and closing isexpected to occur late in the first quarter of this year.

The properties are located in the Permian Basin, East Texas,Oklahoma and Kansas. Aggregate current net production from theproperties totals 9,000 b/d of oil and 11 MMcf/d, Bargo said.

“Through our constant portfolio asset evaluation, we have foundproperties worldwide producing 100,000 boe/d that do not fit ourcore strategy,” said Paul Weeditz, a Texaco spokesman. “That totalis less than 10% of our total production. He added that out of theproperties Texaco has identified as non-strategic, 60% isinternational and 40% is in the U.S.

Weeditz said an important point to realize is that this move wasa high-grade of the portfolio and in no way signals a shift inproduction strategy by Texaco.

Bargo Energy Co., formerly Future Petroleum Corp., is a domesticoil and gas production, exploitation and acquisition firmheadquartered in Houston, Texas. The deal represents the largestpurchase in the company’s 18-month history.

“We’ve performed up to eight property purchases since BargoEnergy formed 18 months ago,” said Jonathan Clarkson, Bargo’spresident. “All of the deals have been with the majors and untilthis deal with Texaco, they have mainly been in the $10-20 millionrange.” Clarkson added that the Texaco deal increases and expandsBargo’s interest in its core area of operations.

John Norris

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