Unocal Sells Unit to Pogo for $1.8 Billion

Monday, July 11th 2005, 10:06 am

By: News On 6

EL SEGUNDO, Calif. (AP) _ Unocal Corp. has agreed to sell a Canadian oil and gas subsidiary, Northrock Resources Ltd., to Pogo Producing Co. for $1.8 billion in cash, the companies announced Monday.

Houston-based Pogo said the acquisition would boost its reserves of both oil and gas by 45 percent to the equivalent of 2.1 trillion cubic feet of natural gas, giving the company ``critical mass'' in western Canada.

Oil makes up 55 percent of Northrock's reserves and natural gas, the remainder.

Northrock operates nearly all of Unocal's oil and gas assets in Canada while accounting for less than 7 percent of its worldwide hydrocarbon reserves and production, the El Segundo-based company said.

Unocal said after-tax proceeds from the sale _ scheduled to close in the third quarter _ are expected to be about $1.5 billion and will be added to its cash and cash-equivalents balance, estimated at about $1.8 billion at the end of the second quarter.

Unocal is the target of competing takeover bids from Cnooc Ltd, a unit of China National Offshore Oil Corp., and industry giant Chevron Corp. Cnooc is offering to pay $18.5 billion for Unocal, which had previously agreed to a $16.6 billion offer from Chevron.