Unocal to Sell California Fields for $500 Million : Energy: Company wants to focus on exploration overseas. Houston-based buyer says it’s undecided on layoffs.

Unocal Corp., whose history began in some of California’s earliest oil fields, said Tuesday that it has reached a preliminary agreement to sell all of its state crude oil and natural gas holdings for more than $500 million in cash to Houston-based Torch Energy Advisors Inc.

The sale would include Unocal’s interests in 69 oil and gas fields stretching from Sacramento to the Los Angeles Basin, and in 11 offshore platforms. The holdings represent about 12% of Unocal’s worldwide oil production and 3.8% of its natural gas production.

The deal is subject to final negotiation and approval by both companies’ boards.

Though the sale would end Unocal’s presence in California’s oil patch, its big chain of service stations is unaffected. The action is part of a larger streamlining that is going on at the Los Angeles-based energy giant under new Chairman Roger C. Beach, successor to Richard Stegemeier, who retired in May.

Unocal, which began life in the 1890s oil fields of Santa Paula, said last year that it would eliminate 630 jobs, or 40% of its corporate staff, and recently announced the move of its headquarters to El Segundo from Downtown Los Angeles.

Officials at Torch said the company has not decided whether the sale would result in layoffs. About 600 jobs are associated with the oil and gas properties.

Unocal said the sale would free up cash to pursue its development of oil and natural gas resources overseas, particularly in Thailand and Myanmar. Other U.S.-based oil companies have been shifting their focus overseas as well.

“Our strategic focus today is on natural gas development in the expanding markets of Asia and exploiting our gas reserve inventory in the Gulf of Mexico,” Beach said in a statement. “We have many opportunities, and the proceeds from this sale would be directed to projects that offer the highest growth potential.”

Unocal also recently told analysts that it would spend $250 million over the next three years to improve its existing service stations and increase cash flow.

Unocal said it began considering a sale of its California properties when it received an unsolicited bid for them in May. Since then, it has entertained at least five offers for the properties, including the winning one from Torch.

In July, 1994, Torch, which said it manages more than $1.5 billion in oil and gas assets on behalf of its clients, purchased Unocal’s interest in the Point Pedernales unit off the coast of California and several fields near Vandenberg Air Force Base in Santa Barbara County.

Doug Foshee, Torch’s president and chief operating officer, said the sale is a good fit for his company. “It’s an issue of focus,” he said. “Unocal’s focus is now on natural gas and international activities, and ours is on oil and domestic properties.”

Under terms of the deal, Unocal could receive further payments beginning in 1998, depending on the price per barrel received by Torch from the properties’ future oil production. No agreement has been reached for Torch to sell oil produced from the properties to Unocal’s refineries.

Unocal said its net daily production from the assets in the proposed sale was 29,000 barrels of oil and 67 million cubic feet of gas for the first half of 1995.

In the United States, Unocal continues to own oil and gas producing property in and near the Gulf of Mexico.

In New York Stock Exchange trading Tuesday, Unocal’s stock edged up 12.5 cents to close at $28.25. The deal was announced after the market closed.