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Texaco Sheds $161M in TX and Midwest Assets

Texaco Sheds $161M in TX and Midwest Assets

As part of its portfolio rationalization effort, Texaco said last week that it has agreed to sell $161.1 million worth of southwestern and Midcontinent properties to Bargo Energy. The effective date of the purchase was Jan. 1, 2000 and closing is expected 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 the properties totals 9,000 b/d of oil and 11 MMcf/d, Bargo said.

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

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

Bargo Energy Co., formerly Future Petroleum Corp., is a domestic oil and gas production, exploitation and acquisition firm headquartered in Houston, Texas. The deal represents the largest purchase in the company's 18-month history.

"We've performed up to eight property purchases since Bargo Energy formed 18 months ago," said Jonathan Clarkson, Bargo's president. "All of the deals have been with the majors and until this deal with Texaco, they have mainly been in the $10-20 million range." Clarkson added that the Texaco deal increases and expands Bargo's interest in its core area of operations.

John Norris

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