Texaco Press Release - Monterey Resources to Merge With Texaco
Combination will Increase Texaco Proved Reserves by 385 Million Barrels; Monterey Management to Urge Shareholder Approval
FOR IMMEDIATE RELEASE: MONDAY, AUGUST 18, 1997.
WHITE PLAINS, N.Y., & BAKERSFIELD, CALIF., Aug. 18 - Texaco Inc. (NYSE: TX) and Monterey Resources, Inc. (NYSE: MRC) announced today that they have signed an agreement to merge in a transaction valued at $1.4 billion. Texaco estimates that it will be able to add 385 million barrels of proved reserves to its U.S. asset base through this combination. Additional probable reserves also have been identified for future development.
Under the terms of the agreement, Texaco will exchange its common stock for all outstanding shares of Monterey, which will be valued at $21 per share. Texaco also will assume Monterey's existing debt of approximately $285 million. Monterey's Board of Directors has agreed to recommend the merger to its shareholders.
Monterey Resources, Inc. is an independent oil and gas producer, with primary holdings in the Midway-Sunset, Kern River, South Belridge and Coalinga fields in California's San Joaquin Valley.
When approved, the transaction will immediately increase Texaco's California production by 54,000 barrels per day, to 180,000 barrels per day, with the potential for additional increases in the next few years.
Commenting on the combination, Texaco Chairman and Chief Executive Officer Peter I. Bijur said, "Gaining Monterey's valuable reserves and talented employees will further enhance Texaco's leadership position in the area of enhanced oil recovery and give us a clear competitive advantage in a region in which we already have significant production and reserves. The combination will enable us to capitalize on our heavy oil expertise to maximize the potential of these fields. It will have a significant positive benefit for the shareholders and employees of both companies."
Monterey Chairman and Chief Executive Officer R. Graham Whaling said, "This strategic merger of Monterey Resources into Texaco will be a tremendous benefit to our shareholders and our employees. We look forward to melding our petroleum assets and our capable people into Texaco."
Claire S. Farley, Vice President of Texaco and President, North America Production, said of the transaction, "Texaco intends to increase proved reserves in these fields through expanded capital investment and application of enhanced oil recovery techniques. Texaco is recognized as having a core competency in finding and producing heavy oil and these new assets are well matched with our knowledge and expertise."
David B. Kilpatrick, President of Monterey Resources added, "Monterey's asset base is a natural complement to the assets of Texaco in California. The merger recognizes the value of our assets and the contributions of the employees that developed those assets into a strong and profitable company. As employees of Texaco, we will continue to manage those properties to further the growth of that fine company."
The merger, which is expected to be completed within 90 days, is subject to the approval of shareholders of Monterey and regulatory agencies.
Updated: August 1997