Ocean Energy Inc. (OEI) announced two separate sales worth acombined $116 million and 164 Bcf of gas last week, as it carriedout a debt reduction plan aimed at preparing the company for itsmerger with Seagull Energy. OEI said shareholders for bothcompanies are holding special meetings March 30 to vote on themerger. If they vote in favor, the company will be officiallymerged that afternoon.

The company sold its entire Canadian presence Friday whenQuintana Minerals Canada Corp., bought OEI’s Canadian subsidiaryfor $74 million. “This was a stock deal, and Quintana bought theentire company,” said Mike Aldridge, Ocean Energy’s vice presidentof corporate communications. “We have no other Canadian assets.”

Earlier last week, Ocean Energy sold $42 million of PermianBasin, Gulf Coast and Gulf of Mexico assets. Various buyers, who’sidentity could not be disclosed, participated in the sale.”Although the sale was substantial, we still have a strong presencein these areas,” Aldridge said.

“When we announced the proposed merger with Seagull, we saidthat we would manage debt and raise capital through the dispositionof assets, with a target of $200 million in asset sales for thecombined company in 1999,” said James C. Flores, Ocean Energypresident. “The $116 million of divestitures Ocean has announced,coupled with $38 million Seagull announced recently, represents asignificant step toward achieving that objective and demonstratesour commitment to debt reduction and the speed with which we areimplementing our business strategy.”

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

John Norris

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