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) December 13, 1999
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UNOCAL CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
1-8483 95-3825062
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(Commission File Number) (I.R.S. Employer Identification No.)
2141 Rosecrans Avenue, Suite 4000, El Segundo, California 90245
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(Address of Principal Executive Offices) (Zip Code)
(310) 726-7600
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(Registrant's Telephone Number, Including Area Code)
Item 5. Other Events.
Mergers and Acquisitions
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Unocal Corporation (Unocal) and Titan Exploration, Inc. (Titan) have
entered into an agreement to merge Unocal's oil and gas exploration and
production assets in the Permian and San Juan basins, located in the West Texas
- - New Mexico area, with Titan into a new publicly traded company named Pure
Energy Resources, Inc.
Pure Energy Resources will have approximately 50 million common shares
outstanding upon the completion of the merger. Unocal will hold 65 percent, or
32.7 million shares of the new company. Upon approving the merger, Titan's
stockholders will receive 0.4302 shares of Pure Energy Resources, Inc. stock for
every share of Titan they currently hold. The transaction is expected to be
completed during the first quarter of 2000.
Jack D. Hightower, current Chief Executive Officer of Titan, will be Chairman
and Chief Executive Officer of the new company. M. Jack Rathbone, former
President of Mobil Producing Texas & New Mexico, Inc., will assume the role of
Executive Vice President of Operations and Gary Dupriest, current Vice president
of Unocal's Permian operations, will assume the role of Vice president of
Production.
Pure Energy Resources' board of directors will consist of Mr. Hightower,
Chairman; Timothy H. Ling, Unocal's Chief Financial Officer and Executive Vice
President for North American Energy Operations; George G. Staley, Executive Vice
President, Exploration of Titan; Herbert C. Williamson, III, energy consultant
and former managing director of Credit Suisse First Boston; Graydon H.
Laughbaum, Jr., global energy advisor and former Senior Vice President of New
Ventures for Unocal; H. D. Maxwell, former President, North American Oil & Gas
Division of Unocal, retired; and one additional Unocal affiliate director yet to
be named.
On a pro forma basis, the new company will have 175 million
barrels-of-oil-equivalent (BOE) in reserves (approximately 80 percent is proved
developed producing) with net production of approximately 40,000 BOE per day.
This production consists of 60 percent natural gas and 40 percent oil on a 6 to
1 MCF per barrel ratio.
Unocal will report the financial and operating results of Pure Energy Resources
on a consolidated basis.
Reserve Replacement Ratio and Finding, Development & Acquisition Costs
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Unocal expects that it will replace approximately 135-145 percent of
its worldwide oil and gas production with new reserves in 1999, and total
finding, development and acquisition (FD&A) costs could be about $5.50-$6.00 per
BOE for the year.
The reserve replacement ratio reflects discoveries and extensions, improved
recovery, price-related and other revisions, purchases of reserves, and sales of
reserves. The company has not yet booked reserves associated with the deepwater
Mirage and Mad Dog discoveries in the Gulf of Mexico.
The estimated reserve replacement ratio and the estimated FD&A costs include
Northrock Resources Ltd. (Northrock). Excluding the minority share of Northrock,
the estimated reserve replacement ratio is 120-130 percent and the estimated
FD&A costs are $6.50-$7.00 per BOE.
Detailed reserve replacement and FD&A data for 1999 are expected to be
published in February 2000.
Forward-looking statements regarding business and market transactions, pro-forma
estimates of reserves and production and estimates regarding the reserve
replacement ratio, possible future reserve bookings, FD&A costs, and other
exploration and production activities in this filing are based on assumptions
concerning operational, market, competitive, regulatory, environmental and other
conditions and considerations. Actual results could differ materially as a
result of factors discussed in Unocal's 1998 Annual Report on Form 10-K.
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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: December 15, 1999 By: /s/ JOE D. CECIL
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Joe D. Cecil
Vice President and Comptroller
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