Nuevo Energy Co. agreed to sell its East Texas gas assets for$190.6 million to an affiliate of Samson Resources Co. The EastTexas assets accounted for about 275 Bcfe of Nuevo’s Jan. 1 provedreserves. The properties are long-lived reserves located mainly inthe Oak Hill Field and interests in the Carthage, SE Carthage andChapel Hill fields, as well as small interests and royaltyinterests in additional East Texas fields.

“This sale of East Texas properties is a strategic move tostrengthen our balance sheet and provide the financial capacity totake advantage of opportunities in the crude oil marketplace,” saidDoug Foshee, Nuevo CEO. “Both the timing of the sale and the priceare in line with our expectations.” Proceeds from the sale will beused to eliminate Nuevo’s outstanding senior bank debt.

The effective date of the sale is July 1, and closing isexpected in December or January. The purchase price is subject toadjustments effective upon closing. Nuevo’s cash flow from theseassets for the first half of 1998 was about $10 million. Theprincipal domestic properties of Houston-based Nuevo are onshoreand offshore California, in East Texas and the onshore Gulf Coastregion. Nuevo is the largest independent producer of oil and gas inCalifornia. Almost all of the reserves sold by Nuevo are gas. Inthe second quarter, Nuevo gas production averaged 89 MMcf/d. Ofthat figure, 37 MMcf/d came from the properties that are to besold.

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