Texaco Sells a Canadian Unit for $375 Million

Texaco Canada Inc. said Wednesday that it has purchased Canadian Reserve Oil & Gas Ltd. for $375 million from a subsidiary of its corporate parent, Texaco Inc.

Texaco, based in White Plains, N.Y., owns 89.6% of the stock of Texaco Canada, based in Toronto.

Texaco’s acquisition of Canadian Reserve, as part of its $10.1-billion purchase of Getty Oil Co. in February, 1984, is still awaiting Canadian government approval. Texaco Canada said its purchase of Canadian Reserve is subject to Texaco obtaining that approval.

Calgary, Alberta-based Canadian Reserve has gross proved reserves of 42 million barrels of crude oil and natural gas liquids and 445 billion cubic feet of natural gas. It also has undeveloped land, especially in western Canada.

Heavy Oil Holdings

Texaco Canada said it expected to benefit from Canadian Reserve’s technological skills relating to heavy oil. Canadian Reserve holds a significant position in the heavy oil areas of Saskatchewan and eastern Alberta.

“The combined organization will be able to develop its properties more aggressively and efficiently than would have been the case had the two companies been under separate ownership, and we expect this united effort to enhance our earnings potential,” said James Dunlap, president of Texaco Canada.

He said many of Canadian Reserve’s properties, such as in the Desan area of northeastern British Columbia, the Vahalla-Saddle Hills region of northern Alberta and the Pembina area of central Alberta, lie near Texaco Canada holdings. Dunlap also said that the purchase would be financed entirely from Texaco Canada’s cash reserves.