Exhibit 99.1
UNOCAL
2141 Rosecrans Avenue, Suite 4000
El Segundo, California 90245
[UNOCAL 76 LOGO]
NEWS RELEASE
CHEVRONTEXACO ANNOUNCES AGREEMENT TO ACQUIRE UNOCAL
o STOCK AND CASH TRANSACTION VALUED AT $18 BILLION
o ACQUISITION EXTENDS CHEVRONTEXACO'S STRATEGIC POSITIONS IN CORE AREAS
o CHEVRONTEXACO PRODUCTION AND PROVED RESERVES EXPECTED TO INCREASE BY MORE
THAN 15 PERCENT
SAN RAMON, CALIF., APRIL 4, 2005 - ChevronTexaco Corporation (NYSE:CVX)
and Unocal Corporation (NYSE:UCL) announced today that ChevronTexaco would
acquire Unocal in a stock and cash transaction valued at approximately $18
billion, including net debt. The acquisition, which is subject to approvals by
Unocal shareholders and certain regulatory agencies, will significantly enhance
ChevronTexaco's position as a leading global energy provider.
"Unocal is a unique independent with supermajor assets that are an
excellent fit with our existing portfolio and our long-term strategies - to grow
profitably in core upstream areas, build new legacy positions and commercialize
our large undeveloped natural gas resource base," ChevronTexaco Chairman and CEO
Dave O'Reilly said. "It is an attractive transaction that provides incremental
value in both the near- and long-term."
"Over the past several years Unocal has been highly successful in
building a portfolio of major international and deepwater assets and prospects,"
said Charles R. Williamson, Unocal Chairman and Chief Executive Officer. "The
combination with ChevronTexaco will provide the financial and technical
resources to maximize the potential of these assets and prospects."
ChevronTexaco expects oil-equivalent production from the combined
portfolios during 2006 to average about 3 million barrels per day. Unocal's 1.75
billion barrels of oil-equivalent proved reserves would increase ChevronTexaco's
reserve base as of the end of 2004 by about 15 percent. The resultant weighting
of natural gas reserves would
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increase by about 5 percentage points to roughly one-third of the oil-equivalent
total. ChevronTexaco expects the transaction to be accretive to ChevronTexaco's
prospective production growth rate.
STRONG STRATEGIC FIT
ChevronTexaco indicated the Unocal assets would provide an enhanced
presence in several of the company's core areas of operations, including:
o ASIA PACIFIC - The combination of the two companies will place
ChevronTexaco in the top tier of natural gas producers and
marketers in this expanding and strategically important region.
ChevronTexaco would become the top oil and gas producer in
Thailand. In Indonesia, extensive oil and gas producing
operations offshore in both the shelf and deepwater areas will
augment ChevronTexaco's significant oil production, principally
onshore. Unocal also markets through the Bontang LNG plant in
Indonesia, complementing ChevronTexaco's current LNG production
in Australia, as well as ChevronTexaco's planned development of
natural gas fields in the greater Gorgon area of Australia and
the shipment of LNG to markets in Asia and North America.
o GULF OF MEXICO - The acquisition will enhance ChevronTexaco's
position in the Gulf of Mexico, where it is already a leading
participant on the shelf and in deepwater opportunities such as
Tahiti, Jack, Blind Faith and Great White. This, when combined
with Unocal's position on the shelf, its interests in Mad Dog,
St. Malo, K2 and Puma in the deep water, and its portfolio of
exploration acreage, will further strengthen ChevronTexaco's Gulf
of Mexico profile.
o CASPIAN REGION - The acquisition will give ChevronTexaco the
second-largest interest in the Azerbaijan International Operating
Company (AIOC) oil producing operations, broadening its status as
a leading oil company in the Caspian region. With AIOC comes a
share in the Baku-Tbilsi-Ceyhan (BTC) export pipeline, further
expanding ChevronTexaco's position in Caspian oil export
infrastructure.
SYNERGY OPPORTUNITIES
O'Reilly said the company would target synergies in a number of
operations and corporate functions by rationalizing duplicate activities and
highgrading investment
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programs. The integration process will focus on combining the strengths of the
two companies into a unified, high-performing enterprise. For example,
ChevronTexaco's proven expertise in project execution, particularly in the deep
water, will help leverage the full value of Unocal's major developments. There
will also be opportunities to add value by adopting Unocal's operating best
practices in ChevronTexaco.
ChevronTexaco expects disposition of assets following the close of the
transaction to result in proceeds of more than $2 billion. Annual savings from
operational synergies and reduced corporate expenses are estimated by
ChevronTexaco at more than $325 million before tax.
TERMS OF THE ACQUISITION
The acquisition consideration is structured as 75 percent stock and 25
percent cash, providing an overall value of approximately $62 per share based on
the closing price of ChevronTexaco stock on April 1. Unocal shareholders may
elect to receive either 1.03 shares of ChevronTexaco stock or $65 in cash for
each share of Unocal stock; however, both of these elections will be subject to
proration. In the aggregate, ChevronTexaco will issue approximately 210 million
shares of ChevronTexaco stock and pay approximately $4.4 billion in cash.
ChevronTexaco will also assume estimated net debt of $1.6 billion.
EFFECTS ON FUTURE FINANCIAL RESULTS
ChevronTexaco estimates the acquisition would be accretive on a cash
flow per-share basis. Further, it will be broadly neutral to earnings per share
after taking into account synergies and significant additional share
repurchases. ChevronTexaco indicated plans for the repurchases, subject to board
approval and consistent with liquidity, legal requirements, and maintaining the
company's AA credit rating. Over the past year, ChevronTexaco repurchased $2.8
billion of its common shares, as part of a $5 billion repurchase program.
INTEGRATION TIMETABLE
Following regulatory approval, the full integration of the two
companies is expected to be completed in six months.
"We have very strong integration capabilities following the merger of
Chevron and Texaco and intend to combine operations and achieve synergies
quickly and efficiently," O'Reilly said. "At the same time, we remain strongly
focused on enhancing
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our existing base business and increasing global production through development
of our strong queue of capital projects.
"ChevronTexaco and Unocal share common roots in the oil fields of
California and we believe we have highly compatible business cultures and
values. A very attractive element of this combination is the opportunity to
integrate two highly capable groups of employees to continue to drive
world-class performance," O'Reilly said.
Williamson said, "In our discussions with ChevronTexaco it is clear
that we share similar values and have comparable corporate cultures. This merger
will be a good fit."
O'Reilly concluded by saying, "The immediate benefits of this
combination are tangible and the longer-term value is even more compelling. We
believe it will significantly enhance our company's position as a leading
competitor and the partner-of-choice in the global energy industry."
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LEHMAN BROTHERS is acting as financial advisor to ChevronTexaco Corporation.
PILLSBURY WINTHROP SHAW PITTMAN LLP is acting as legal advisor. MORGAN STANLEY
& CO. INC. is acting as financial advisor to Unocal Corporation. WACHTELL,
LIPTON, ROSEN & KATZ is acting a legal advisor to Unocal.
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ABOUT CHEVRONTEXACO
ChevronTexaco Corporation is one of the world's leading energy companies. With
more than 47,000 employees, ChevronTexaco subsidiaries conduct business in
approximately 180 countries around the world, producing and transporting crude
oil and natural gas, and refining, marketing and distributing fuels and other
energy products. ChevronTexaco is based in San Ramon, Calif. More information on
ChevronTexaco is available at www.chevrontexaco.com.
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ABOUT UNOCAL
Unocal is one of the world's leading independent natural gas and crude oil
exploration and production companies. With more than 6,000 employees, the
company's principal oil and gas activities are in Asia and North America. Unocal
has no refining or marketing operations.
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INVESTORS NOTE: A conference call to follow-up on the announcement of this
agreement will take place this morning, Monday, April 4, 2005, at 6:00 a.m. PDT.
A Webcast of the meeting will be available in a listen-only mode to individual
investors, media and other interested parties on ChevronTexaco's Web site at
www.chevrontexaco.com under the "Investors" heading and at (973) 582-2734.
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MEDIA NOTE: A conference call for media with ChevronTexaco Chairman and CEO
along with Unocal Chairman and CEO, providing more details on the acquisition
will take place this morning, Monday, April 4, 2005 between 7:30 a.m. and 8:00
a.m. PDT. The call-in number is (973) 582-2757.
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CAUTIONARY STATEMENTS RELEVANT TO FORWARD-LOOKING INFORMATION
FOR THE PURPOSE OF "SAFE HARBOR" PROVISIONS OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
Except for the historical and factual information contained herein, the matters
set forth in this press release, including statements as to the expected
benefits of the acquisition such as efficiencies, cost savings, market profile
and financial strength, and the competitive ability and position of the combined
company, and other statements identified by words such as "estimates, "expects,"
"projects," "plans," and similar expressions are forward-looking statements
within the meaning of the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements are subject to
risks and uncertainties that may cause actual results to differ materially,
including required approvals by Unocal shareholders and regulatory agencies, the
possibility that the anticipated benefits from the acquisition cannot be fully
realized, the possibility that costs or difficulties related to the integration
of Unocal operations into ChevronTexaco will be greater than expected, the
impact of competition and other risk factors relating to our industry as
detailed from time to time in each of ChevronTexaco's and Unocal's reports filed
with the SEC. You should not place undue reliance on these forward-looking
statements, which speak only as of the date of this press release. Unless
legally required, neither ChevronTexaco nor Unocal undertakes no obligation to
update publicly any forward-looking statements, whether as a result of new
information, future events or otherwise.
ADDITIONAL INFORMATION
ChevronTexaco will file a Form S-4, Unocal will file a proxy statement and both
companies will file other relevant documents concerning the proposed merger
transaction with the Securities and Exchange Commission (SEC). INVESTORS ARE
URGED TO READ THE FORM S-4 AND PROXY STATEMENT WHEN THEY BECOME AVAILABLE AND
ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION. You will be able to obtain the documents free of charge
at the website maintained by the SEC at www.sec.gov. In addition, you may obtain
documents filed with the SEC by ChevronTexaco free of charge by contacting
ChevronTexaco Comptroller's Department, 6001 Bollinger Canyon Road - A3201, San
Ramon, CA 94583-2324. You may obtain documents filed with the SEC by Unocal free
of charge by contacting Unocal Stockholder Services at (800) 252-2233, 2141
Rosecrans Avenue, Suite 4000, El Segundo, CA 90245, e-mail:
stockholder_services@unocal.com.
ChevronTexaco, Unocal, and their respective directors and executive officers,
may be deemed to be participants in the solicitation of proxies from Unocal's
stockholders in
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connection with the merger. Information about the directors and executive
officers of ChevronTexaco and their ownership of ChevronTexaco stock is set
forth in the proxy statement for ChevronTexaco's 2005 Annual Meeting of
Stockholders. Information about the directors and executive officers of Unocal
and their ownership of Unocal stock will be set forth in the proxy statement for
Unocal's 2005 Annual Meeting of Stockholders. Investors may obtain additional
information regarding the interests of such participants by reading the Form S-4
and proxy statement for the merger when they become available.
Investors should read the Form S-4 and proxy statement carefully when they
become available before making any voting or investment decisions.
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