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Unocal Seeks the Rest of Northrock

Unocal Seeks the Rest of Northrock

Unocal Canada Resources said last week it plans to conditionally offer C$221 million for the 52% of Northrock Resources Ltd. that it does not already own. The Unocal subsidiary acquired 19.6 million shares of Calgary-based Northrock in transactions announced in April 1999 (see NGI, April 19, 1999).

Northrock has average daily gross production of 160 MMcf, 11,000 barrels of crude oil and gas liquids. It holds net proved reserves of 35 million bbl of oil and liquids and 363 Bcf of gas.

Unocal does not expect Northrock's board to decide until it has received and considered a valuation from an independent appraiser. Accordingly, Unocal does not expect to mail the offer documents to shareholders until early May.

Various conditions will have to be satisfied before the offer is made. Northrock's board of directors will have to recommend acceptance of the offer to the shareholders, the two will have to enter into a definitive support agreement regarding the offer, and Unocal's board must approve the deal.

Once the offer is made, the deal will need regulatory approvals and a minimum of 90% of the Northrock shares not already owned by Unocal in order to close.

Lane said the purchase is important to Unocal's overall plans. "You have to look at it in the context of a North American gas strategy. It fits in with the overall continental plan." Other Canadian assets owned by Unocal Canada Resources include the Aitken Creek storage facilities and the Calven Pipeline. Overall, Unocal's Canadian production is 10,000 boe/d, Lane said.

Joe Fisher, Houston

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