Two recently announced deals provide further proof thatindependent producers are finding it tough going in the current lowcommodity price environment. Houston-based independentRutherford-Moran Oil Corp. struck a deal with Chevron to allow itto continue activities in the Gulf of Thailand, and EEX announcedit is selling $150 million of securities to fund its deep-waterdevelopment program.

Chevron agreed to acquire Rutherford-Moran Oil Corp. for about$91 million and assumption of about $302 million in debt.Rutherford Moran’s activities are concentrated in the Gulf ofThailand where it owns a 46.34% interest in Block B8/32.Rutherford-Moran has been talking to potential buyers and saidrecently that it would run out of cash and bank financing byFebruary if it failed to strike a deal.

“This acquisition provides Chevron with a strategic entry intothe Thailand gas market,” said Richard Matzke, president of ChevronOverseas Petroleum Inc. “We see long-term potential in SoutheastAsia and are confident this entry will lead to additionalattractive investments.”

The deal allows Rutherford-Moran to continue exploration anddevelopment of its Gulf of Thailand property. Block B8/32, about125 miles offshore, has proven reserves of 153 million barrels ofoil equivalent gas with upside potential. Current production isfrom the Tantawan field with significant development anddelineation currently underway in two new fields. Block B8/32 alsohas additional exploration potential and is adjacent to explorationBlocks 7, 8 and 9 in which Chevron holds an interest.

The agreement is subject to certain commercial conditions whichmust be satisfied for the transaction to be completed, and therecan be no assurance these conditions will be met. Among thoseconditions is an agreement between Chevron and Pogo Producing Co.,a joint-venture partner with Rutherford-Moran in the B8/32concession in the Gulf of Thailand. Pogo said it has been contactedby Chevron but would not speculate on whether an agreement would bereached between Pogo and Chevron.

Houston-based independent EEX Corp. is selling $150 million ofsecurities to London investment firm Warburg, Pincus EquityPartners. The deal follows a recent EEX announcement that it isselling its onshore oil and gas production in Oklahoma and NorthTexas for $32 million (see Daily GPI Dec 16, 1998). Proceeds fromthe sale of securities and properties are both to be poured intothe company’s deep-water Gulf of Mexico drilling program.

©Copyright 1998 Intelligence Press Inc. All rights reserved. Thepreceding news report may not be republished or redistributed, inwhole or in part, in any form, without prior written consent ofIntelligence Press, Inc.