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Unocal, Titan Form Pure Resources in Permian, San Juan
Unocal Corp. has separated out its oil and gas exploration and production assets in the Permian and San Juan basins, merging that segment of its operations with Midland, TX-based Titan Exploration, Inc., to create a new publicly traded company named Pure Resources, Inc.
Pure began trading on the New York Stock Exchange last Friday under the "PRS" symbol. The new company has approximately 50 million common shares outstanding, with Unocal holding 65.4%, or 32.7 million shares, while Titan shareholders own the other 34.6%. Plans for the new company were first announced last December. (See NGI, Dec. 20)
The merger creates one of the largest independent exploration and production companies doing business in its core geographic area. At the Jan. 1, 2000, effective date for the merger, Pure had pro forma combined proved reserves of approximately 1.02 Tcf of natural-gas-equivalent (NGE), 80% of which are proved, developed and producing. The new company has net daily production of approximately 230 MMcf/d of NGE, about 60% of which is natural gas.
While combining its Texas and New Mexico assets under the direction of former Titan CEO Jack D. Hightower, who holds the same position with Pure, Unocal's Spirit Energy 76 unit will continue to be focused on its key Gulf of Mexico growth areas. The company also has been moving in the Canadian arena, with an offer to buy the 52% of Calgary-based Northrock Resources Ltd. That it does not already own. (See NGI, April 17)
The merger was approved overwhelmingly by Titan stockholders at a special meeting last Wednesday. Titan stockholders will receive .4302314 shares of Pure for each share of Titan.
"We are very excited about the creation of this new, entrepreneurial company," said Roger Beach, Unocal chairman and chief executive officer. "Pure has the high-quality assets to provide near-term earnings while at the same time focusing on the growth opportunities presented by the restructuring and consolidation taking place in the industry."
Beach noted that the new company has significant potential to grow through the drillbit and through acquisitions. "By combining Unocal's assets and operating expertise with Titan's technological ability and in-depth knowledge of the region, Pure has what it takes for success in the Permian, one of the world's most prolific basins," he added.
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