Unocal Corp. is merging its E&P assets in the Permian and San Juan basins with Midland-based Titan Exploration Inc., forming a new publicly traded company that will be named Pure Energy Resources Inc. The new company, which will be 65% held by Unocal, will have approximately 50 million common shares outstanding once the merger is completed, which is expected during this quarter. Titan's stockholders will receive 0.4302 share of Pure Energy per share of Midland-based Titan. "This merger will create an entrepreneurial oil and gas exploration company, with a strong balance sheet and the foundation to pursue profitable drillbit and acquisition opportunities in an area of operations centered in the Permian and San Juan basins," Unocal chairman Roger C. Beach says. The El Segundo, Calif., independent will contribute a significant, high-quality Permian Basin business unit that is recognized as an industry leader in operating expertise. "Titan is extremely creative and knowledgeable in the region and has been very successful in applying advanced technologies to increase value," Beach adds. Jack D. Hightower, Titan CEO, will be chairman and CEO of the new company. "This is a great asset base that presents our shareholders with a balanced portfolio of lowrisk development, near-field exploration and higher-risk technology plays," he says. M. Jack Rathbone, former president of Mobil Producing Texas & New Mexico Inc., will assume the role of Pure Energy executive vice president of operations. Gary Dupriest, current vice president of Unocal's Permian operations, will become the new company's vice president of production. Pure Energy will be one of the largest independents in its core geographic areas. On a pro forma basis, it will have 175 million BOE in reserves (approximately 80% proved developed producing), with net production of approximately 40,000 BOE per day. Combined production will be 60% natural gas. Unocal will report the financial and operating results of Pure Energy on a consolidated basis. "The merger will be accretive to both Unocal and Titan stockholders as a result of significant synergies and opportunities for profitable growth," predicted Timothy H. Ling, Unocal chief financial officer and executive vice president for North American energy operations. "There is significant overlap in the properties, and the operating and administrative synergies from the merger should result in cost savings of at least $5 million per year." -Nick Snow
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