Pacific Enterprises Sells Oil, Gas Assets to Hunt : Utilities: The parent of Southern California Gas is shedding subsidiaries to ease its debt burden.
Pacific Enterprises Corp. on Monday announced the $371-million sale of its domestic oil and gas assets to Hunt Oil Co., saying the deal will allow it to concentrate on its core utility business.
The Los Angeles company, which is in the process of being broken up after a number of acquisitions during the 1980s, said the sale includes energy reserves on nearly 1.4 million acres of land in the Rocky Mountains, the Midwest and Gulf Coast states.
The oil and gas reserves are equivalent to 63 million barrels of crude.
Hunt Oil, based in Dallas, is owned by the Hunt family of Texas and chaired by Ray Hunt.
The sale involves the bulk of Pacific Enterprises’ oil and gas exploration and production operations, which generated $324 million in revenue last year.
Proceeds will go to pay off the company’s debt and strengthen its balance sheet.
“The sale of these assets represents another major step forward in the restructuring plan we announced earlier this year,” Pacific Enterprises Chairman Willis Wood said.
Wood also said the company is in separate negotiations to sell its Canadian subsidiary, Pacific Enterprise Oil Co. (Canada).
Pacific Enterprises owns the nation’s largest natural gas distribution utility--Southern California Gas Co.--which it has been trying to concentrate on by getting rid of non-utility businesses.
The company sold its Thrifty Corp. drug and sporting goods retailing subsidiary in September.
Pacific Enterprises has had to take massive write-downs on oil and gas, and its retail businesses, which have wiped out earnings.
The company took a $156-million, or $2.09 a share, after-tax charge against second-quarter earnings to reflect an expected loss on the sale of its oil and gas assets.
Wood said the company does not anticipate adjusting the charge as a result of the sale agreement.
The sale could be completed by the end of the year, the company said.
Pacific Enterprises stock closed up 50 cents at $19.25 a share on the New York Stock Exchange.
