Western Natural Gas Plans to Relocate to Dallas in’86

Western Natural Gas, a relatively quiet and until now unprofitable public company that moved here in 1981, will relocate to Dallas early next year, company president George Forbes said Thursday.

The relocation was sparked by Western Natural’s purchase on Thursday of some of the assets of Dallas-based Hudson Resources Corp., including an interest in 14 gas wells in eastern Texas.

“We’ve been planning this for some time,” Forbes said. “We’ll be very active oil and gas operators, and we’ll have engineers and geologists. They’d just be flying back and forth at a lot of unnecessary expense.”

Western Natural will pay Hudson $450,000 in 14 months, will issue 160,000 shares of restricted Western Natural stock and will grant an option to buy another 150,000 shares of restricted Western Natural stock within three years.

Under the acquisition agreement, Western Natural will operate and receive 5% of the proceeds from two exploratory wells that will be drilled this month.

Hudson Resources will use the funds to settle some of its debts, said Forbes. The company will own 17% of Western Natural stock, becoming the second-largest shareholder following the 36.5% equity interest of International Tours, a Tulsa, Okla.-based company that gained its shares from a $2-million recapitalization plan last August.

Western Natural’s acquisition includes an interest in a 12,800-acre extension of the Naconiche Creek gas field in eastern Texas, where Hudson Resources owns a working interest in 14 wells that gross between 25 million and 45 million cubic feet of gas per day.

Western Natural moved to La Jolla in June, 1981. Before that, it was known as Dowdle Oil Co. of Midland, Tex., which filed for Chapter 11 reorganization bankruptcy in 1979.

The company emerged from Chapter 11 in 1982 but has been unprofitable since then.

For the nine months ended Sept. 30, Western Natural reported a net loss of $427,639 on revenues of $589,219, compared to a comparable loss of $146,762 and revenues of $917,651 in the prior year.

The company has been operating profitably in the latter part of the fourth quarter, said Forbes. “Everything we own is producing something, and we’ve sold off all the things that weren’t. (Unfortunately), we sold them for less than we paid for them because they were overvalued when we took them in.”

Western Natural currently employs only four workers, but that will increase to between eight and 12 in the next three months, Forbes said.