Forest Oil signs PSA to buy 70 Gulf of Mexico fields from Unocal

Sept. 22, 2003
Forest Oil Corp., Denver, has signed a purchase and sale agreement to buy 70 properties in the Gulf of Mexico and onshore Louisiana from Unocal Corp.'s gulf region business unit for $295 million.

By OGJ editors

HOUSTON, Sept. 22 -- Forest Oil Corp., Denver, has signed a purchase and sale agreement to buy 70 properties in the Gulf of Mexico and onshore Louisiana from Unocal Corp.'s gulf region business unit for $295 million.

For Unocal the sale is being conducted as part of the company's initiative announced earlier in the year to improve the profitability and sustainability of its Lower-48 exploration and production businesses, the company said. The properties included in the sale represent the majority of the gulf properties earlier earmarked for divestment by the company, Unocal said, adding that it expects to divest the remaining 20 properties before yearend.

The transaction, which is expected to close by the end of October, will have an effective date of sale of July 1. Unocal said it will use the sale's net proceeds to reduce its debt and increase the company's funding capacity for its inventory of development projects and discoveries.

As of July 1, the fields included in the PSA hold about 34 million boe of reserves. Net production from the properties at the same date was about 18,000 boe/d.

After the sale is completed, Unocal's gulf region unit will own about 25 fields with production of about 67,000 boe/d. Unocal retains the option to begin deep exploration on many of the fields being sold to Forest, the company explained.