PROPERTY DISPOSITIONS / Union Pacific Resources Group Inc. Asset Sales
Closings Total Over $690 Million
FORT WORTH, Texas--(BUSINESS WIRE)--Jan. 22, 1999--Union Pacific Resources Group Inc. (NYSE:UPR) today announced that completed sales of assets reached a total of more than $690 million with the closings on January 15 of the previously announced South Texas and Canadian Caroline-Swan Hill asset sales. Caroline-Swan Hill was sold to Newport Petroleum Corporation for Canadian$165 million, equivalent to US$108 million, and Collins & Ware purchased the South Texas properties for $137.5 million.
''We are pleased with the progress of our deleveraging program and with the value we have received for the assets sold,'' UPR Chairman and CEO Jack Messman said. ''We are on schedule to meet the 18-24 month deadline we set last April for reducing the Company's debt by $2 billion.''
These closings substantially complete the Company's producing property divestiture program, except for smaller packages in South Louisiana and East Texas. The proceeds, combined with $1.35 billion expected from the closing in March of its gas gathering, processing and marketing business sale to Duke Energy Field Services Inc., will bring deleveraging sales to a total of approximately $2.1 billion. An after-tax net of roughly $1.7 billion will be applied to debt reduction. UPR expects to reduce debt further from 1999 operating cash flow to achieve its $2 billion objective.
The sales closed to date as part of the deleveraging program are listed below:
Package Price (approx.)
$MM
---------------- ------
DJ Basin Package $ 41
Gulf of Mexico: Matagorda Island Blocks $ 158
Rockies Package: $ 46
Gulf of Mexico: Eugene Island 148, et. al. $ 8
Canadian Package $ 145
Caroline-Swan Hill $ 108
South Texas Package $ 138
Superior Propane $ 47
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Total (approx.): $ 691
UPR announced an agreement last September to sell the South Texas package to Collins & Ware for $148 million. The $137.5 million closing price is the result of a $5.5 million due diligence adjustment, coupled with an agreement under which UPR could receive an additional $5 million from incremental future production and commodity price increases. The difference between the announced sale price of $110 million for Caroline-Swan Hill and the closing price of $108 million is the result of U.S.-Canadian currency fluctuations.
Union Pacific Resources is one of the nation's largest independent oil and gas exploration and production companies. Based in Fort Worth, Texas, UPR has been the No. 1 domestic driller for the past seven years and is the No. 1 gas producer in the state of Texas.
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