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Seagull Asset Sales Gross $52M
Houston-based Seagull Energy Corp. said it garnered about $52.5million in gross proceeds from asset dispositions made during thefinal months of 1998. The money will be used to cut debt.
The sales were primarily of non-strategic oil and gas producingproperties in several onshore areas of the southwestern UnitedStates. These transactions, which included two negotiated sales andthree auctions, involved the equivalent of about 60 Bcf of provedgas reserves that during 1998 produced at a rate of 20 MMcfe/d. Inaddition to its sales of non-strategic producing oil and gasproperties, Seagull also sold a small gas gathering pipeline andprocessing facility for $4 million and hopes to complete sales ofits remaining gathering and pipeline assets early in 1999.
“These steps are designed to help us streamline operations andfocus more attention on our core operations in today’s environmentof low commodity prices,” noted James T. Hackett, Seagull CEO.”They also are just the beginning of what will be a continuingprocess of rationalizing non-strategic assets, both in theimmediate future and after we complete our planned merger withOcean Energy Inc., before the end of [the first quarer].”
Hackett said following completion of the merger the combinedcompanies contemplate asset dispositions of between $100 millionand $200 million in both 1999 and 2000. Sales of less efficienthigh-cost properties are expected to result in operatingefficiencies over and above the $45 million in general andadministrative cost reductions the companies expect to realize intheir first year as a new entity.
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