1
EXHIBIT 99.1
NEWS RELEASE EASTERLY INVESTOR RELATIONS
Client: Rutherford-Moran Oil Corporation
FOR IMMEDIATE RELEASE Contacts: Dave Chavenson, CFO
Rutherford-Moran Oil Corporation
713-622-5555
Ken Dennard, Easterly I.R.
kdennard@easterly.com
713-529-6600
RUTHERFORD-MORAN ANNOUNCES MERGER
AGREEMENT WITH CHEVRON CORPORATION
DECEMBER 23, 1998 - HOUSTON, TEXAS - Rutherford-Moran Oil Corporation
(NASDAQ:RMOC) announced today that it has entered into a definitive merger
agreement with Chevron Corporation (NYSE:CHV) pursuant to which Chevron will
acquire all the outstanding shares of Rutherford-Moran for approximately $91
million in Chevron common stock, representing a value of approximately $3.50 for
each fully diluted share of Rutherford-Moran common stock, and the assumption of
debt (including all liabilities) totaling over $302 million.
The merger is subject to a number of conditions, including execution of a
new joint operating agreement with Pogo Producing Company (NYSE:PPP),
Rutherford-Moran's joint venture partner in the Block B8/32 concession of the
Gulf of Thailand, which would allow for Chevron to assume operatorship of the
concession from Pogo. No understandings or agreements have yet been reached with
respect to such an agreement. The merger agreement is also conditioned upon
Chevron reaching an agreement with Palang Sophon Limited, the other partner in
the concession, to acquire at least a five percent interest in the concession
from them. Palang Sophon Ltd. is controlled by a director of Rutherford-Moran
and Rutherford-Moran is optimistic that Chevron and Palang will reach such an
agreement.
The merger agreement will also require the approval of the stockholders of
Rutherford-Moran. Chevron's stockholders will not need to approve the merger
agreement. While the parties expect to consummate the merger by April 1999, no
assurances can be given that all conditions will be satisfied prior to such
time, or that the merger will be consummated. The issuance of Chevron shares in
the merger also requires the approval of the Chevron Board of Directors which is
expected at the regular meeting scheduled for the end of January. In the event
2
that the issuance of shares is not approved by the Chevron board,
Rutherford-Moran would have the option to proceed with the merger on a cash
basis at the same per share amount.
Rutherford-Moran also reported on the status of its financial resources and
liquidity. Rutherford-Moran said that its ongoing exploration and development
activities in Block B8/32 of the Gulf of Thailand continue to require funding
and that it expects to exhaust its currently available cash reserves and
available bank credit in February 1999. Rutherford-Moran currently has
outstanding debt totaling approximately $302 million, of which approximately
$182 million has been borrowed under a bank credit facility with its lender.
While its lender has indicated that it is not currently willing to increase the
commitment under the facility, the merger agreement provides that upon the
satisfaction of most conditions, including reaching a new joint operating
agreement with Pogo Producing Company, Chevron would provide Rutherford-Moran
with an interim financing facility. In the event of the termination of the
merger agreement with Chevron or if the conditions to the interim financing
facility are not satisfied, Rutherford-Moran indicated that no assurances can be
given that it will be able to obtain financing sufficient under those
circumstances to fund its ongoing operations.
In connection with entering into the merger agreement, the Company's lender
has also agreed to return warrants to purchase approximately 2,100,000 shares of
the Company's common stock at an exercise price of $.01 per share prior to
Closing. If the agreement with Chevron is terminated, the warrants would remain
outstanding.
Patrick R. Rutherford, Jr. and John A. Moran, the two principal
shareholders who hold approximately 75% of the outstanding shares, have agreed
to vote their shares in favor of the merger and have granted Chevron proxies to
vote their shares in connection with the merger or any other acquisition
proposals involving Rutherford-Moran. These shareholders have also granted
Chevron an option to purchase their Rutherford-Moran shares for the same per
share price provided for in the merger agreement. If Chevron exercises the
option, most of the conditions to Chevron's obligation to consummate the merger
would be deemed satisfied or waived.
Rutherford-Moran Oil Corporation is an independent energy company that
concentrates its activities in Southeast Asia. Currently, the Company's
exploration and development activities
3
are conducted through its subsidiary, Thai Romo Limited, a limited liability
company existing under the laws of Thailand and its affiliate, B8/32 Partners,
Ltd.
Certain statements in this news release constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Such forward-looking statements involve known and unknown risks,
uncertainties, and other factors which may cause the actual results,
performance, or achievements of Rutherford-Moran Oil Corporation to be
materially different from any future results, performance, or achievements
expressed or implied by such forward-looking statements. Such factors include,
among others, the following: the volatility of oil and gas prices, the Company's
ability to replace its oil and gas reserves, the Company's need for and
availability of substantial additional capital resources, the Company's
substantial indebtedness, the reliance upon estimates of proved reserves,
operating hazards and uninsured risks, competition, government regulation, and
the ability of the Company to implement its business strategy. These factors are
discussed in more detail in the Company's recent Form 10-K and Form 10-Q filing
with the Securities and Exchange Commission.
# # #