Ocean Energy announced Tuesday it has signed purchase and salesagreements with various companies to divest certain U.S. onshoreassets in an effort to reduce its debt before merging with SeagullEnergy Corp. The sales total $42 million and are located primarilyin the Midcontinent, Permian Basin and Rocky Mountain regions.

“We made an agreement with Seagull that we would reduce our debtby at least $100 million and aim for $200 million,” said SusanSmith, an Ocean Energy spokeswoman. “This sale is the first step inthis process.” In February, Ocean Energy announced planned assetsales worth $200 million in 1999, in order to improve its operatingmargins. The company said it intends to divest interests in allCanadian oil and gas properties and related assets as well ascertain non-core oil and gas properties and related assets locatedin the Rocky Mountain, Midcontinent, Permian Basin, Gulf Coast andGulf of Mexico regions. The properties comprise net proved reserves164 Bcf. Including the effects of a $200 million fourth quarterwritedown, Ocean Energy reported a net loss of $229.5 million, or$2.27 per share on revenues of $124.2 million for the fourthquarter of 1998. By comparison, net income for the fourth quarterof 1997 was $21.7 million, or $0.22 per share on revenues of $167.8million.

Ocean Energy expects most of the sales to close by the end ofMarch with the remainder closing before May.

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