Texaco and Apache Corporation Sign Memorandum of Understanding for the Sale of Over 300 Producing Fields

Strategic Insights -

Texaco and Apache Corporation have reached a significant milestone in their respective plans for growth, as outlined in a memorandum of understanding signed on November 29, 1994. The agreement contemplates the sale of over 300 scattered Texaco producing fields to Apache for approximately $600 million. This sale is a crucial step in Texaco's plan to dispose of underperforming U.S. properties, which cumulatively contribute zero earnings and less than ten percent of Texaco's domestic upstream cash flow. The proceeds from the sale will be redirected to focus on the company's most profitable properties and invest in growth opportunities across the organization.

Key Takeaways:

  • The sale of over 300 scattered Texaco producing fields to Apache Corporation is valued at approximately $600 million.
  • The sale represents a significant milestone in Texaco's plan to dispose of underperforming U.S. properties, which contribute zero earnings and less than ten percent of Texaco's domestic upstream cash flow.
  • The proceeds from the sale will be redeployed into growth opportunities across the company, including major expenditures on core producing properties in the U.S.
  • The properties included in the sale are located in Texas, Louisiana, East and South Texas, Rocky Mountains, and the Midcontinent area of the U.S.
  • The sale is subject to signing of the purchase and sale agreement, certain government approvals, as well as approval by both companies' Boards of Directors.
  • Texaco has also offered for sale selective other producing properties largely in California and the Williston Basin in North Dakota.
  • The effective date of the sale is set for January 1, 1995, with an expected closing in the first quarter of 1995.

Statistics:

  • Over 300 scattered Texaco producing fields are being sold to Apache Corporation for approximately $600 million.
  • The properties included in the sale are located in major U.S. petroleum-producing regions.
  • The proceeds from the sale will be redeployed to focus on Texaco's most profitable properties and invest in growth opportunities.
  • The sale represents a crucial step in Texaco's plan to dispose of underperforming U.S. properties, which contribute zero earnings and less than ten percent of Texaco's domestic upstream cash flow.

Sources:

  • Business Wire, November 29, 1994
  • Texaco Corporation, Press Release, November 29, 1994