-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, A++67X/clGSMZId2L9YV/doboVSFfOBTM+Hi9CqG/QOiHGVcvsXmvMbQxO9qM8jb sBjn+VWy80fHTB0GxzIHxw== 0000950123-02-008646.txt : 20020904 0000950123-02-008646.hdr.sgml : 20020904 20020904140625 ACCESSION NUMBER: 0000950123-02-008646 CONFORMED SUBMISSION TYPE: 425 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20020904 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: PURE RESOURCES INC CENTRAL INDEX KEY: 0001109860 STANDARD INDUSTRIAL CLASSIFICATION: OIL AND GAS FIELD EXPLORATION SERVICES [1382] IRS NUMBER: 742952918 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 425 SEC ACT: 1934 Act SEC FILE NUMBER: 001-15899 FILM NUMBER: 02756291 BUSINESS ADDRESS: STREET 1: 500 WEST ILLINOIS CITY: MIDLAND STATE: TX ZIP: 79701 BUSINESS PHONE: 915-498-8600 MAIL ADDRESS: STREET 1: 500 WEST ILLINOIS CITY: MIDLAND STATE: TX ZIP: 79701 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: UNOCAL CORP CENTRAL INDEX KEY: 0000716039 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 953825062 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 425 BUSINESS ADDRESS: STREET 1: 2141 ROSECRANS AVE STREET 2: STE 4000 CITY: EL SEGUNDO STATE: CA ZIP: 90245 BUSINESS PHONE: 3107267600 MAIL ADDRESS: STREET 1: 2141 ROSECRANS AVE STREET 2: STE 4000 CITY: EL SEGUNDO STATE: CA ZIP: 90245 425 1 y63645ae425.txt PRESENTATION Filed by Unocal Corporation Pursuant to Rule 425 under the Securities Act of 1933 and deemed filed pursuant to Rule 14a-12 of the Securities Exchange Act of 1934 Subject Company: Pure Resources, Inc. Commission File No. 001-15899 Dated: September 4, 2002 On September 4, 2002 Unocal Corporation made the following presentation: 2002 LEHMAN BROTHERS CEO ENERGY/POWER CONFERENCE UNOCAL CORPORATION CHARLES R. WILLIAMSON CHAIRMAN & CHIEF EXECUTIVE OFFICER New York September 4, 2002 [UNOCAL (76) LOGO] UNOCAL A STRONG PORTFOLIO OF E&P ASSETS - -------------------------------------------------------------------------------- >> ESTABLISHED LEGACY ASSETS North America, Thailand, Indonesia, Azerbaijan >> NEW DEEPWATER OIL DEVELOPMENTS Indonesia, Gulf of Mexico >> LARGE ASIAN GAS DISCOVERIES Deepwater Indonesia Thailand, Bangladesh, Vietnam >> LEVERAGED EXPLORATION PROGRAMS Deep shelf Gulf of Mexico Deepwater Indonesia, Gulf of Mexico UNOCAL OUR STRENGTHS - -------------------------------------------------------------------------------- >> Builder of SUCCESSFUL INTERNATIONAL BUSINESSES >> Huge discovered / unbooked ASIAN GAS RESOURCES >> Major player in U.S. NATURAL GAS market >> OPERATIONS EXCELLENCE - costs, drilling, safety >> SHAREHOLDER FOCUSED - committed to performance UNOCAL RESOURCE BASE - -------------------------------------------------------------------------------- RESERVES (MMBOE) PRODUCTION (MBOE/D) 12/31/2001 2001 AVERAGE [PIE CHART] [PIE CHART] Far East - 47% [854] Far East - 38% [189] Other Intl. - 15% [267] Other Intl. - 6% [30] Lower 48 - 27% [489] Lower 48 - 41% [209] Alaska - 6% [109] Alaska - 8% [43] Canada - 5% [99] Canada - 7% [33]
TOTAL: 1,818 MILLION TOTAL: 504,000 BARRELS BARRELS OF OIL EQUIVALENT OF OIL EQUIVALENT PER DAY 62% gas 66% gas 38% oil 34% oil NORTH AMERICAN E&P COMPANIES WORLDWIDE OIL & GAS PRODUCTION - -------------------------------------------------------------------------------- MMBOE (12/31/01) [BAR GRAPH] ENCANA - 2,350 ANADARKO - 2,305 BURLINGTON - 1,968 UNOCAL - 1,818 DEVON - 1,620 KERR-MCGEE - 1,509 APACHE - 1,267 TALISMAN - 1,181 EOG - 705 PIONEER - 672 OCEAN - 601
Source: JP Morgan NORTH AMERICAN E&P COMPANIES WORLDWIDE OIL & GAS PRODUCTION - -------------------------------------------------------------------------------- MBOE/D (2001) [BAR GRAPH] ENCANA - 646 ANADARKO - 544 UNOCAL - 504 TALISMAN - 419 BURLINGTON - 397 DEVON - 369 APACHE - 344 KERR-MCGEE - 298 EOG - 183
Source: Bloomberg 2002 OPERATIONAL RECAP - -------------------------------------------------------------------------------- >> 5 MAJOR NEW DEVELOPMENTS ON SCHEDULE / ON BUDGET (AIOC, West Seno, Mad Dog, Pailin II, Thai oil) >> SUCCESSFUL APPRAISAL PROGRAMS UNDER WAY (Trident, Ranggas, South Kenai gas) >> HIGH-SCOPE EXPLORATION ONGOING (DW Indonesia, GOM Deep Shelf, DW GOM) >> ASIAN GAS PROGRESS (Indonesia, Thailand, Vietnam, Bangladesh, China) 2002 FINANCIAL PROJECTIONS - -------------------------------------------------------------------------------- >> Earnings per share: $1.70 - $1.90 >> DCF per share: $7.25 - $7.40 >> ROE: 13% - 14.5% >> Debt/Market Cap: < 45% UNOCAL INTERNATIONAL OPERATIONS - -------------------------------------------------------------------------------- [MAP OF COUNTRIES: NETHERLANDS, AZERBAIJAN, CHINA, BANGLADESH, CONGO, BRAZIL, MAYANMAR, THAILAND, VIETNAM, INDONESIA, AUSTRALIA] PRODUCTION (2001): >> 895 MMCFD >> 70,000 BOPD RESERVES (12/31/01): >> 1,121 MMBOE UNOCAL INDONESIA - E. KALIMANTAN - -------------------------------------------------------------------------------- [] UNOCAL PSC AREAS [] UNOCAL DEEPWATER DISCOVERIES [SMALL MAP OF BRUNEI, MALAYSIA, KALIMANTAN] [LARGE MAP OF COAST] DEEPWATER INDONESIA CONTINUED SUCCESS - -------------------------------------------------------------------------------- >> West Seno production expected April 2003 >> Ranggas oil / gas discovery nearly appraised >> 2003 exploration focused on deeper target oil plays and new outboard acreage >> Big gas (> 10 TCF) and condensate discoveries partly appraised; scoping for acceleration underway INDONESIA -- W. SENO FIELD DEVELOPMENT - -------------------------------------------------------------------------------- PHASE 1 PHASE 2 - 60 MBOPD/150 MMCFD CAPACITY - 48-52 WELLS - 2 TLPS [PICTURE OF [PICTURE OF - 1 SPREAD-MOORED FPU BARGE WELL] WELL] - OIL AND GAS PIPELINE TO SANTAN - EXISTING OIL STORAGE AND OFFLOADING - GAS TIE-IN TO BONTANG NETWORK - PHASE I: $415 MM NET UNOCAL - PHASE II: $200 MM NET UNOCAL 2003 - 2005 [UNOCAL LOGO] SOUTHERN AREA DEEPWATER: BIG GAS & CONDENSATE - -------------------------------------------------------------------------------- [] UNOCAL PSCS [] OTHER OPEATORS' PSCS [MAP OF BONTANG LNG PLANT, SANTAN TERMINAL, BALIKPAPAN [2 - 2.5 TCF GAS; 50-150 MM BBL. COND.], GULA [1-8 TCF* - A SUPER GIANT], GANAL BLOCK, GANDANG AND GENDALE [GANDANG-GENDALO- 1.5 - 3.8 TCF* PLUS CONDENSATE] * P10-P90 GROSS DISCOVERY VOLUMES UCL WORKING INTEREST 80% INDONESIA DEEPWATER: "BIG GAS" IS GOOD! - -------------------------------------------------------------------------------- >> Bontang LNG plant market share is allocated in proportion to each company's share of certified Kutei Basin gas reserves >> Bontang plant input: - Existing LNG trains: 3450 MMCFD - Train I [plait expansion]: 525 MMCFD >> Large DW gas reserves would put Unocal in position to supply 30-to-50% of plant's future consumption >> Unocal's deepwater gas potential reserves on current acreage: 5 - 10 TCF (net) INDONESIA -- BONTANG LNG PLANT ADDITIONAL GAS MARKET POTENTIAL - -------------------------------------------------------------------------------- [MMCF/D] [BAR GRAPH] AIOC DEVELOPMENT PROJECT - -------------------------------------------------------------------------------- [MAP OF TBILISI, BAKU AND CEYHAN] PROPOSED MAIN EXPORT PIPELINE - ----------------------------- >> Route: Baku - Tbilisi - Ceyhan >> Cost: - $3 billion >> 70/30 debt/equity project finance >> Capacity: 1 MM BOPD >> First oil delivery planned 1Q 2005 >> Unocal working interest: 8.9% AIOC CONTRACT AREA (in Baku) - ------------------ >> 4.3 TO 7.3 BILLION BARRELS OF OIL RECOVERABLE BY 2024 >> Successful "early oil" project now producing ~130,000 BOPD >> Unocal has 10.28% interest >> Phase I adds 375,000 BOPD at peak >> Phase II adds 400,000 BOPD at peak [AIOC logo] CASPIAN SEA [AIOC logo] AIOC - A WORLD CLASS OIL DEVELOPMENT - -------------------------------------------------------------------------------- >> Unocal is second-largest owner after BP >> 4.3 to 7.3 billion barrels of oil recoverable by 2024 >> Full field development now under way >> B-T-C pipeline approved, financed and ready to begin construction UNOCAL NET PRODUCTION WILL INCREASE FROM 13,000 BOPD TODAY TO >80,000 BOPD BY 2008 AOIC PRODUCTION 800,000 BOPD BY 2008 - -------------------------------------------------------------------------------- [BAR GRAPH] AIOC: INCREASINGLY MATERIAL TO UNOCAL - -------------------------------------------------------------------------------- >> Over 140 MMBO of reserve adds expected over next five years at ~ $5.00 F&D >> Net production from approved developments expected to reach >60,000 BOPD in 2007 & >80,000 BOPD in 2008 (equivalent to 16% of Unocal's current production) >> CURRENT EARNINGS MARGIN OF $7.50 PER BARREL CLIMBS TO ~ $10.00 BY 2007 THAILAND - MYANMAR - VIETNAM - -------------------------------------------------------------------------------- [MAP OF THAILAND] LEASE AREAS - ----------- MYANMAR THAILAND VIETNAM PIPELINES - --------- EXISTING PROPOSED XX POWER PLANTS XX INDUSTRIAL UNOCAL IN THAILAND - -------------------------------------------------------------------------------- >> Over 3 decades of successful energy development >> ~ 1 BCFD gross production from 13 fields in the Gulf of Thailand (Unocal net ~ 600 MMCFD) >> Unocal production supports ~ 1/3 of Thailand's electricity generation and ~ 1/4 of total energy supply >> Large resource base and extensive infrastructure in place >> Innovative, low-cost drilling and development techniques successfully employed THAILAND / MYANMAR CONTINUED MARKET GROWTH, NEW OIL PRODUCTION - -------------------------------------------------------------------------------- UNOCAL NET PRODUCTION [BAR GRAPH] UNOCAL THAILAND WHERE OUR GROWTH WILL COME FROM - -------------------------------------------------------------------------------- >> Continued strong market growth for natural gas >> Yala / Plamuk oil facilities upgrade and reservoir performance improvement >> Proposed third pipeline from Gulf of Thailand contract areas to shore >> Development of Arthit discovery THAILAND POWER CONSUMPTION 1999 -- 2002 - -------------------------------------------------------------------------------- [GRAPH] Vietnam -- An Emerging Gas Market - -------------------------------------------------------------------------------- [MAP OF DISCOVERIES] BANGLADESH WORLD CLASS GAS RESOURCES - -------------------------------------------------------------------------------- [MAP OF BANGLADESH - DISCOVERIES including bibiyana, Jalalabad, Moulavi Bazar)] >> Producing > 80 MMCFD [gross] from Jalalabad; recent peak as high as 130 MMCFD >> Potential for significant additional domestic deliveries beginning late 2002/early 2003 >> Export rhetoric continues, but productive dialogue is occurring >> Giant discoveries in place, waiting to serve domestic or export markets CHINA: XIHU TROUGH NATURAL GAS - -------------------------------------------------------------------------------- >> Xihu area is 21 sq. miles; ~ 300 ft. water depth; ~ 200 mi. offshore >> 21 exploration wells drilled since 1980 [MAP OF SOUTH CHINA] >> 12 hydrocarbon discoveries (underdeveloped natural gas) >> Resource potential: ~ 4 TCF >> Attractive East China Market >> Unocal negotiating for a 20% interest UNBOOKED ASIAN OIL & GAS DISCOVERIES (POTENTIAL RESERVES) - -------------------------------------------------------------------------------- THAILAND/MYANMAR 2-3 TCFE VIETNAM 1-3 TCF BANGLADESH 2-5 TCF INDONESIA 5-10 TCFE TOTAL: 10-21 TCFE (1.7 - 3.5 BBOE)
UNOCAL NORTH AMERICAN OPERATIONS - -------------------------------------------------------------------------------- [MAP OF NORTH AMERICA] PRODUCTION (2001): >> 1,110 MMCFD >> 100,000 BOPD RESERVES (12/31/01): >> ~ 700 MMBOE IMPROVING NORTH AMERICAN MARGINS - -------------------------------------------------------------------------------- KEY ACTIVITIES - -------------- >> Aggressively pursuing deep shelf and deepwater exploration in the Gulf of Mexico >> Reducing emphasis and capital for near-term, small-scale exploitation & exploration projects >> Offering to acquire 100% interest in Pure Resources >> Building on Canadian business performance improvements >> Restructuring Gulf of Mexico and Alaska operations to significantly improve cost structure >> Re-engineering shared services for greater efficiencies BUILDING A SUSTAINABLE BUSINESS IN THE GULF REGION WILL REQUIRE... - -------------------------------------------------------------------------------- >> Deep shelf exploration success >> Paced and focused deepwater exploration program >> Relentless optimization of asset portfolio >> Continued improvement in drilling and completion efficiency >> Reduced direct and indirect cost structure TARGETING DEEP SHELF OPPORTUNITIES KEY GOM PROSPECTS - -------------------------------------------------------------------------------- [MAP OF COASTAL TEXAS, LOUISIANA AND ALABAMA] 2002 DEEP SHELF DRILLING PROGRAM -------------------------------- - 12 GROSS EXPLORATION WELLS - TARGETS: 50 - 400 BCF - UCL W.I. (RANGE): 33% - 75% .... September 2002 inventory update GULF OF MEXICO DEEPWATER 2002-2003 PROGRAM - -------------------------------------------------------------------------------- >> Continue appraisal of Trident discovery, including assessment of co-development options >> Appraise K2 discovery (currently drilling) >> Proceed with Mad Dog development >> Push for commercialization of Mirage discovery >> Drill 3 - 4 Central Gulf prospects in 2003 - Prospect sizes: 200 - 1,000 MMBOE (gross) - Expected UCL net capex: $ 45-75 MM - Focus on areas near major discoveries MAD DOG FIELD - -------------------------------------------------------------------------------- [MAP OF DRILLING AREAS] FIRST PRODUCTION: 2004 RISKED FULL-FIELD RECOVERY POTENTIAL - 4 exploration/appraisal wells - 200 - 450 MMBOE (P10-P90) PRODUCTION CAPACITY - 80,000 BOPD - 50 MMCFD MAD DOG OWNERSHIP - BP 60.5% (operator) - BHP 23.9% - Unocal 15.6% (13.275% net) TRIDENT DISCOVERY PERDIDO FOLDBELT/ALAMINOS CANYON AREA - -------------------------------------------------------------------------------- [MAP OF WELL AREAS] TRIDENT DISCOVERY PERDIDO FOLDBELT/ALAMINOS CANYON AREA - -------------------------------------------------------------------------------- >> Trident #1 discovery well (8/01) encountered 300+ feet of pay >> Trident #2 appraisal well (1/02) confirmed lateral continuity of reservoir >> High-quality oil (40+ API gravity) >> 200-400 MMBOE gross resource potential >> Unocal has 59.5% working interest UNOCAL DEEPWATER GOM NEAR-TERM PROSPECT INVENTORY - -------------------------------------------------------------------------------- [MAP OF COASTAL TEXAS, LOUISIANA, MISSISSIPPI AND ALABAMA - DISCOVERIES] UNOCAL (W.I.) DISCOVERIES OTHER DISCOVERIES UNOCAL PROSPECTS CANADA/NORTHROCK SUMMARY - -------------------------------------------------------------------------------- >> Annual production: 33,000 BOE/D (~ 2/3 gas & NGL) >> Annual spend of $140 MM, 2/3 of which is for exploitation and development (E&D) activities >> E&D activities concentrated in Southeast and Southwest Saskatchewan, plus Alberta >> Performance has been improving on core E&D over last two years >> Frontier exploration plays in Northwest Territories, British Columbia and Foothills in Alberta >> Two key discoveries in 2002 (still tight) & aggressive addition of surrounding acreage have created significant trend upside UNOCAL NORTH AMERICAN OPERATIONS - -------------------------------------------------------------------------------- [MAP] UNOCAL CURRENTLY OWNS 65% OF PURE RESOURCES >> PRODUCTION: ~ 65,000 MBOED (~ 2/3 GAS) >> RESERVES: ~ 245 MMBOE (~ 2/3 GAS) >> ACTIVITIES MAINLY FOCUSED ONSHORE IN PERMIAN & SAN JUAN BASINS UNOCAL - PURE RESOURCES [PURE RESOURCES LOGO] EXCHANGE OFFER - -------------------------------------------------------------------------------- BASIC TERMS: - Pure stockholders to be offered 0.6527 shares of Unocal common stock for each share of Pure not currently owned (35%) - Offer expected to commence on or about 9/5; will remain open for 20 business days - Unocal would issue approximately 12 MM shares to cover exchange FINANCIAL IMPACT TO UNOCAL: - Neutral to earnings; provides access to Pure's operating cash flow (~ $200 MM / year) - Slight improvement in debt-to-cap & cash flow ratios UNOCAL - PURE RESOURCES [PURE RESOURCES LOGO] EXCHANGE OFFER - -------------------------------------------------------------------------------- BENEFITS TO UNOCAL: - - Cash flow from Pure's assets can be directed to highest-return opportunities in UCL's global portfolio - - Potential for $15 MM in pre-tax cost reductions - - Would give Unocal a direct foothold in several significant emerging Permian Basin deep gas plays - - Would provide asset portfolio rationalization opportunities WHERE WILL OUR PRODUCTION GROWTH COME FROM? - -------------------------------------------------------------------------------- >> INDONESIA DEEPWATER (West Seno, Ranggas, Bangka, M. Besar) >> AIOC (Phases 1 & 2) >> GULF OF MEXICO DEEPWATER (Mad Dog, Trident, K2, Mirage) >> GULF OF MEXICO DEEP SHELF (exploration success) >> THAILAND (market development, possible third pipeline, Arthit) >> CHINA (Xihu Trough) MAJOR E&P OPERATIONS WHAT TO WATCH FOR IN 2003 - -------------------------------------------------------------------------------- >> Gulf of Mexico - Deepwater exploration program focused around significant industry discoveries - Full-year deep shelf exploration program >> Indonesia - West Seno on track to begin production in April - Ranggas development initiated - Deeper target oil exploration; gas & condensate appraisal programs continue MAJOR E&P OPERATIONS WHAT TO WATCH FOR IN 2003 - -------------------------------------------------------------------------------- >> Thailand - Moderate production growth to meet growing market >> Azerbaijan - AIOC Phases 1 & 2 development - Construction begins on B-T-C export pipeline >> Long-term Asia gas projects - Continued progress in accelerating development (Thailand, Indonesia, Vietnam, Bangladesh, China) ADDITIONAL INFORMATION AND WHERE TO FIND IT In connection with the proposed transaction, Unocal expects to file an exchange offer prospectus and related materials with the Securities and Exchange Commission. These materials will contain important information. Investors and security holders are advised to carefully review this document and related materials when they become available. Investors and security holders may obtain a free copy of the exchange offer prospectus and other documents filed by Unocal with the commission at the commission's web site, www.sec.gov. Copies of the exchange offer prospectus, as well as Unocal's related filings made with the Commission, may also be obtained from Unocal's Investor Relations Department at 310-726-7667. This presentation contains certain forward-looking statements about future business transactions involving Unocal and Pure. These statements are not guarantees of future performance and involve certain risks and uncertainties that are difficult to predict. The statements are based upon Unocal's current expectations and beliefs and are subject to a number of known and unknown risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Actual results could differ materially from what is expressed or forecasted in this news release. Those risk factors are discussed in the Unocal and Pure Annual Reports on Form 10-K and subsequent reports that have been filed by the companies with the U.S. Securities and Exchange Commission. ##### -----END PRIVACY-ENHANCED MESSAGE-----