Tenneco Announces Buyers For Most Oil and Gas Businesses
HOUSTON (AP) _ Tenneco Inc. has traveled further in its exodus from the volatile oil and gas business by reaching agreements to sell its oil and gas operations for an amount expected to exceed $7.3 billion.
Although negotiations continued for some minor operations, the nation’s 10th largest oil company said Monday it had entered into definitive contracts with several buyers.
At least 10 companies said Monday they had agreed to buy part of Tenneco. The company planned to release more information today following a board meeting.
The Houston-based company announced in May its plans to sell Tenneco Oil Co. - which accounts for about 22 percent of total revenue - and use the proceeds to help pay its hefty $8.5 billion debt.
Analysts earlier had predicted the sale would fetch between $5 billion and $7 billion.
After the sale, company officials said, Tenneco’s businesses would be composed of 31 percent farm and construction equipment; 23 percent pipeline; 14 percent shipbuilding; 13 percent auto parts; 10 percent packaging; and 9 percent chemical.
Chevron Corp. said it agreed to buy Tenneco’s Gulf of Mexico oil and natural gas reserves, production facilities and leasehold interests for nearly $2.6 billion. The San Francisco-based Chevron said the transaction requires federal approval.
Texas oilman T. Boone Pickens’ Mesa Limited Partnership agreed to buy the mid-continent division oil and gas subsidiary for $715 million.
Fina Oil and Chemical Co., American Petrofina’s principal operating subsidiary, agreed to buy Tenneco’s Gulf Coast-Southwestern exploration and production business in a stock purchase plan valued at a little more than $600 million.
Houston-based Seagull Energy Corp. signed letters of intent to buy the outstanding capital stock of Houston Oil & Minerals Corp., an indirect wholly- owned subsidiary of Tenneco, for $16.4 million.
Others buying part of the Tenneco divisions are New York-based Mobil Corp., Los Angeles-based Arco, Chicago-based Amoco Corp., and Conoco Norway Inc., a subsidiary of Houston-based Conoco Inc.
Mobil announced Monday it signed a definitive agreement to buy Tenneco’s Chalmette, La., refinery and related facilities for $560 million and an adjustment for working capital.
Arco is buying Tenneco’s California operations for $670 million to $700 million while Amoco’s production company unit agreed to buy Tenneco Oil Co.’s Rocky Mountain division for $900 million.
Also Monday, a subsidiary of Houston-based Conoco Inc. announced Monday it has agreed to purchase the Norwegian affiliate of Tenneco for $115 million.
The agreement provides for Conoco Norway Inc. to buy 100 percent of Tenneco Oil Norway A.S shares, subject to the approval of the Norwegian government. Tenneco Norway has about 125 million barrels of oil equivalent reserves awaiting development.
For the second quarter of 1988, Tenneco posted net income of $154 million. The earnings included a one-time gain of $23 million related to the sale of a European shipping and storage company and a New Jersey heating oil retailing company.
Total sales and operations revenue for the quarter were $3.9 billion. Operating income for the quarter was $322 million, excluding operating income of $147 million for Tenneco Oil Co.