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,
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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