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Ocean Energy Divests $116 M of Assets to Reduce Debt

March 29, 1999
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Ocean Energy Divests $116 M of Assets to Reduce Debt

Ocean Energy Inc. (OEI) announced two separate sales worth a combined $116 million and 164 Bcf of gas last week, as it carried out a debt reduction plan aimed at preparing the company for its merger with Seagull Energy. OEI said shareholders for both companies are holding special meetings March 30 to vote on the merger. If they vote in favor, the company will be officially merged that afternoon.

The company sold its entire Canadian presence Friday when Quintana Minerals Canada Corp., bought OEI's Canadian subsidiary for $74 million. "This was a stock deal, and Quintana bought the entire company," said Mike Aldridge, Ocean Energy's vice president of corporate communications. "We have no other Canadian assets."

Earlier last week, Ocean Energy sold $42 million of Permian Basin, Gulf Coast and Gulf of Mexico assets. Various buyers, who's identity could not be disclosed, participated in the sale. "Although the sale was substantial, we still have a strong presence in these areas," Aldridge said.

"When we announced the proposed merger with Seagull, we said that we would manage debt and raise capital through the disposition of assets, with a target of $200 million in asset sales for the combined company in 1999,'' said James C. Flores, Ocean Energy president. "The $116 million of divestitures Ocean has announced, coupled with $38 million Seagull announced recently, represents a significant step toward achieving that objective and demonstrates our commitment to debt reduction and the speed with which we are implementing our business strategy."

Ocean Energy expects the sales to close by the end of April with the remainder closing before May. Nesbitt Burns, Inc. acted as financial advisor to Ocean Energy for the Canadian transaction.

John Norris

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