Unocal's Spirit Energy 76 reaches definitive agreement on sale of Michigan oil and gas assets
Sugar Land, Texas, March 31, 1999 - Unocal Corporation's Spirit Energy 76 unit today said that it has reached a definitive agreement to sell substantially all of its oil and gas assets in Michigan to Quicksilver Resources Inc., for $27 million in cash plus approximately $3 million of unregistered common stock of Quicksilver.
The sale includes approximately 20,000 net leasehold acres producing about 13 million cubic feet of natural gas equivalent per day (net). Estimated reserves were not disclosed.
Spirit Energy said that the sale is consistent with its recent efforts to focus more of its primary exploration and production activities onshore in Texas and the Gulf Coast region and offshore in the Gulf of Mexico.
The transaction is expected to close during the second quarter, with an effective date of January 1, 1999. Completion of the transaction is subject to certain conditions, and the stock will be subject to certain restrictions.
Unocal expects to record an aftertax gain on the sale in the second quarter. The amount of the gain will be determined at closing.
The Quicksilver shares will be distributed to Spirit Energy 76 over a three-year period and will be subject to downward adjustment in correlation to certain costs, expenses and liabilities incurred during this period.
Fort Worth-based Quicksilver Resources Inc., engages in the acquisition, exploration, production and sale of natural gas, condensate and crude oil.
Spirit Energy 76, Unocal Corporation's U.S. Lower 48 exploration and production
unit, has major operations onshore in Texas and Louisiana and on the Gulf of Mexico
shelf, in addition to a significant presence in the Gulf of Mexico deepwater.
Unocal is one of the world's largest independent oil and gas exploration and production companies, with resource development, power plant and pipeline projects in Asia, the U.S. Gulf of Mexico region and Latin America.
Forward-looking statements regarding business transactions and market activity in this news release are based on assumptions concerning market, competitive, regulatory, environmental, operational and other considerations. Actual results could differ materially as a result of factors discussed in Unocal's 1998 Form 10-K report filed with the Securities and Exchange Commission.
Updated: March 1999