SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
Current Report Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported) April 15, 1998
----------------
UNOCAL CORPORATION
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware
- --------------------------------------------------------------------------------
(State or Other Jurisdiction of Incorporation)
1-8483 95-3825062
- --------------------------------------------------------------------------------
(Commission File Number) (I.R.S. Employer Identification No.)
2141 Rosecrans Avenue, Suite 4000, El Segundo, California 90245
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(310) 726-7600
- --------------------------------------------------------------------------------
(Registrant's Telephone Number, Including Area Code)
Item 5. Other Events.
On April 15, 1998 the following news release was issued:
Unocal Canada completes exchange of assets
for Tarragon common stock and debenture
---------------------------------------
El Segundo, Calif., April 15, 1998 - Unocal Corporation said today that
its Unocal Canada Limited subsidiary has completed the exchange of certain of
its Canadian oil and gas assets for approximately $208 million (C$297 million)
in common stock and debenture of Tarragon Oil and Gas Limited.
Under the transaction, Unocal Canada received 21 million shares of
Tarragon common stock and a $70 million (C$100 million) Tarragon subordinated
debenture with a floating coupon rate of 150 basis points over the three-year
Government of Canada Treasury bond rate (fixed quarterly). The common share
position gives Unocal Canada a 28.7-percent ownership in Tarragon.
The transaction also gives Unocal representation on Tarragon's board of
directors. Unocal has the option to participate on a limited basis in any future
equity offerings by Tarragon to permit Unocal to maintain its interest. Unocal
is not generally permitted to increase its interest in Tarragon.
"This exchange enables us to realize full value for these Canadian
assets and participate in the growth potential of Tarragon's other operations,"
said Charles R. Williamson, Unocal group vice president.
Williamson added that the exchange is accretive to Unocal's reserves
and production. "We also expect to see Tarragon's aggressive approach increase
reserves and production in the future."
Unocal Canada transferred all of its producing oil and gas assets in
Alberta, essentially all of its producing assets in British Columbia,
substantially all of its undeveloped lands in Alberta and certain of its
undeveloped lands in British Columbia to Tarragon.
These assets include proved reserves of approximately 31 million
barrels of oil equivalent (boe), 348,000 net acres of undeveloped land, up to
24,700 miles (39,500
kilometers) of 2-D seismic data, and 1,400 linear miles (2,200 linear
kilometers) of proprietary 3-D seismic data. The undeveloped land being
transferred to Tarragon is comprised of 330,000 net acres in Alberta (78%
average working interest) and 18,000 net acres in British Columbia (74% average
working interest).
Net production from the Unocal Canada properties currently averages
about 12,700 boe per day. The Unocal Canada reserves and production data are
reported on a U.S. basis after royalties, with natural gas converted at a 6:1
ratio.
Unocal Canada will retain its interests in the Alliance Pipeline
project, the Aitken Creek Gas Storage Project in British Columbia, the Cal Ven
Pipeline, interests in the Northwest Territories and oil and gas producing
properties located in Southwest Saskatchewan. Net production from Southwest
Saskatchewan is about 6,200 boe per day. Unocal Canada is currently in
discussions with certain parties regarding the non-operated Southwest
Saskatchewan assets.
Unocal Canada has approximately 100 employees. Under the terms of the
agreement, Tarragon has offered employment opportunities to the Unocal Canada
employees who are necessary to operate the assets, as well as those employees
that have the skills and necessary experience to benefit the expanded Tarragon
organization.
The transaction has been approved by Tarragon's stockholders and
necessary government agencies. Tarragon stock closed at $6.56 (C$9.40) on the
Toronto exchange yesterday (April 14).
CIBC Wood Gundy Securities Inc. advised Unocal in respect to
this transaction.
Unocal is one of the world's largest independent oil and gas
exploration and production companies, with major resource development, power
plant and pipeline projects in Central and Southeast Asia, Latin America and the
U.S. Gulf of Mexico region.
Forward-looking statements, including estimates of future business
arrangements and operating forecasts in this news release are based on
assumptions concerning market, competitive, regulatory, environmental,
operational and other considerations. Actual results could differ materially.
For more information about Unocal and its activities, visit Unocal's
web site at www.unocal.com.
Unocal Canada Limited/
Tarragon Oil and Gas Limited
Asset Exchange Fact Sheet
U.S. DOLLAR AMOUNTS ARE CONVERTED AT THE 4/14/98 FOREIGN CURRENCY EXCHANGE RATE;
MARKET PRICES QUOTED AT CLOSE OF TRADING ON TORONTO STOCK EXCHANGE ON 4/14/98.
PRODUCTION AND RESERVE DATA ARE STATED IN ACCORDANCE WITH ACCEPTED U.S.
REPORTING PRACTICES
Value of Approximately $208 million (C$297 million): 21 million shares
transaction of Tarragon Oil & Gas Limited - market value ~$6.56 (C$9.40)
/share $70 million (C$100 million) in senior sub-
ordinated debentures with a floating coupon rate (current
rate: 7.04%)
Unocal Canada Producing properties: Slave, Red Earth and Sturgeon fields
assets contributed fields in northern Alberta; Kakwa, Kaybob and Virginia Hills
in west-central Alberta; and Fireweed in northeast British
Columbia 348,000 net acres undeveloped land Up to 24,700
miles of 2-D seismic data 1,400 linear miles of proprietary
3-D seismic
UNOCAL CANADA ASSET OPERATING DATA (1997)
Proved reserves
(12/31/97) 31 million boe: 15.9 mmbbl oil & NGL, 91.4 bcf gas
Net production 12,700 boe/d: 7,900 bbl oil & NGL/d,
29 mmcf gas/d
UNOCAL'S PRO FORMA 28.7% INTEREST IN TARRAGON
Proved reserves
(12/31/97) 57.9 million boe: 28 million bbl oil & NGL,
182 bcf gas
Production 17,100 boe/d: 8,300 bbl oil & NGL/d,
53 mmcf gas/d
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
UNOCAL CORPORATION
(Registrant)
Date: April 20, 1998 By: /s/ JOE D. CECIL
- --------------------- --------------------------
Joe D. Cecil
Vice President and Comptroller