Torch Energy Advisors Inc. Reaches Agreement with Unocal on Sale of California Oil and Gas Holdings

Strategic Insights -

Torch Energy Advisors Inc. and its institutional investors have reached an agreement in principle with Unocal Corp. on the sale price for Unocal's crude oil and natural gas holdings in California, valued at over $500 million. The negotiations are ongoing, and a final sale agreement is expected to be reached. The acquisition will add over $500 million in assets under management for Torch Energy, marking a significant event in the company's history.

Key Takeaways:

  • Torch Energy Advisors Inc. has agreed to pay over $500 million in cash for Unocal's crude oil and natural gas holdings in California.
  • The negotiations involve Unocal's interest in 69 oil and gas fields, including 11 producing platforms off the California coast in state and federal waters.
  • The acquisition will add over $500 million in assets under management for Torch Energy, making it a significant event in the company's history.
  • Torch Energy manages over $1.5 billion in oil and gas assets on behalf of its clients.
  • The final agreement will be subject to approval by the Unocal and Torch boards of directors and certain consents, approvals, and waiting periods.
  • The sale is contingent on Torch's price per barrel received for future oil production, with potential additional payments beginning in 1998.
  • Torch Energy was one of five companies that submitted proposals in late May, with Unocal electing to negotiate with the company after an extensive review.

Statistics:

  • Over $500 million: the cash price for Unocal's crude oil and natural gas holdings in California.
  • 69: the number of oil and gas fields involved in the sale.
  • 11: the number of producing platforms off the California coast in state and federal waters.
  • 29,000: the net daily production of oil from Unocal's upstream assets in 1995.
  • 67 million: the cubic feet of gas from Unocal's upstream assets in 1995.
  • $1.5 billion: the amount of oil and gas assets managed by Torch Energy on behalf of its clients.
  • 1994: the year in which Torch Energy purchased Unocal's interest in the Point Pedernales unit offshore California and several onshore fields in Santa Barbara County.
  • 1998: the year in which Torch may make additional payments for the acquisition, contingent upon Torch's price per barrel received for future oil production.

Sources:

  • Unocal Corp. press release, accessed through PR Newswire's Fax on Demand service.
  • Torch Energy Advisors Inc. press release.