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Unocal Selling Michigan Assets to Quicksilver

Unocal Selling Michigan Assets to Quicksilver

Unocal Corp.'s Spirit Energy 76 agreed to sell substantially all of its oil and gas assets in Michigan to Quicksilver Resources Inc. for $27 million cash and about $3 million in unregistered common stock of Quicksilver.

The sale includes about 20,000 net leasehold acres producing about 13 MMcfe/d of gas (net). Estimated reserves were not disclosed. The acquisition is expected to be accretive to Quicksilver's 1999 revenues, EBITDA, and net income, and should increase total production by 25% to 68 MMcfe/d. The company had 1998 net income of $4.9 million and EBITDA of $26.5 million.

Spirit Energy said the sale is consistent with an increased focus on primary exploration and production activities in Texas, the Gulf Coast region and the Gulf of Mexico. The transaction is expected to close during the second quarter, with an effective date of Jan. 1.

In September MSR Exploration announced an agreement to merge with Quicksilver Resources to create a combined company - named Quicksilver Resources - five times larger than the former MSR in terms of total assets.

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