SECURITIES AND EXCHANGE COMMISSION
Washington, DC. 20549
FORM 8-K
Current Report Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported) November 18, 1996
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UNOCAL CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
1-8483 95-3825062
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(Commission File Number) (I.R.S. Employer Identification No.)
2141 Rosecrans Avenue, Suite 4000, El Segundo, California 90245
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(Address of Principal Executive Offices) (Zip Code)
(310) 726-7600
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(Registrant's Telephone Number, Including Area Code)
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Item 5. Other Event
On November 18, 1996, the following news release was issued:
UNOCAL SIGNS LETTER OF INTENT TO SELL
WEST COAST DOWNSTREAM ASSETS TO TOSCO;
DEAL VALUED AT APPROXIMATELY $2 BILLION
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El Segundo, Calif., Nov. 18, 1996 -- Unocal today said it has signed a
letter of intent to sell its West Coast petroleum refining, marketing and
transportation assets to Stamford, Conn.-based Tosco Corporation.
The sale is valued between $1.9 and $2.1 billion, including $1.4
billion for the refining, marketing and transportation fixed assets,
approximately $400 million for inventories, and up to $250 million in possible
participation payments should gasoline margins increase in the next seven years.
In addition, Unocal will liquidate $80 million in net receivables, which will
not be part of this transaction.
The assets to be sold are currently operated by Unocal's 76 Products
Company business unit, which is headquartered in Costa Mesa, Calif. The letter
of intent anticipates that the sale will be closed in the first quarter of 1997.
"We are pleased with the proposed terms of this sale because they
represent a significant value for our stockholders," said Roger C. Beach, Unocal
chairman and chief executive officer.
Beach said that the sale of Unocal's West Coast refining, marketing and
transportation assets is part of the company's long-term strategy to grow by
pursuing large, long-life projects in Asia. "With this sale, we can focus on
expanding our role as a major international energy producer and project
developer and on strengthening our domestic U.S. oil and gas operations in the
Louisiana/Gulf of Mexico region," he said.
<PAGE>
Beach also noted that the company's Diversified Business Group, which includes
agricultural products, Molycorp, UNO-VEN, and other businesses, will continue to
be an important part of Unocal's operations.
Beach said the company is building on its long experience and
reputation from operations in Asia, particularly in Thailand, Indonesia and the
Philippines. "We are now moving ahead with a variety of new projects throughout
Asia," Beach said. He cited significant expansion of the company's operations in
Thailand and Indonesia, the Yadana natural gas project in Myanmar, pipelines to
transport crude oil and natural gas from Turkmenistan to markets in Pakistan, a
new LPG terminal in China, exploration and development opportunities in
Bangladesh and Vietnam, and an independent power project in Thailand.
The fixed assets that would be sold include Unocal's California
refineries in San Francisco, Santa Maria and Los Angeles, which have a combined
capacity of 251,000-barrels-per-day; various terminals, bulk plants and
pipelines; Unocal's lubricants business; Unocal's retail marketing business,
including approximately 1,100 controlled sites and 250 branded, non-controlled
sites in six Western states; the company's commercial and industrial petroleum
products business; three ocean-going tankers; inventories of hydrocarbon
products; credit card systems; and other assets. Unocal expects to record a $375
million aftertax book loss from the sale of the assets.
The sale is subject to negotiation of a final agreement; approval by
various regulatory agencies and Tosco shareholders; and the satisfaction of
certain other conditions. Tosco plans to use debt and equity financing for the
purchase.
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UNOCAL CORPORATION
WEST COAST REFINING, MARKETING & TRANSPORTATION
ASSET SALE LETTER OF INTENT
FACT SHEET
PROPOSED TERMS OF SALE:
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Sales Price: $1.4 billion for fixed assets
Approximately $400 million for inventories
Net Receivables: Unocal will liquidate $80 million in net
receivables, not part of the transaction
Participation Payment: $250 million cap; 7-year term; payment
computed and paid semi-annually; portion
of increase in gasoline margins above
base average
Form of payment: 100% cash (at closing, Tosco has option of
giving Unocal up to $400 million in Tosco
stock in lieu of cash)
Closing: First quarter 1997
ASSETS INFORMATION
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Refineries San Francisco Refinery (Rodeo, Calif.) -
77,000 b/d
Santa Maria Refinery (Arroyo Grande, Calif.)
- 44,000 b/d
Los Angeles Refinery (Carson and Wilmington,
Calif.) - 130,000 b/d
Retail marketing business Approximately 1,100 controlled sites and 250
non-controlled sites in California,
Arizona, Nevada, Oregon, Washington, and
Hawaii
Ships Three oceangoing vessels (Sierra Madre, Blue
Ridge and Coast Range)
Other assets and businesses Various terminals, bulk plants, and
pipelines (excluding Avila, Calif., tanks,
wharf and related facilities); Unocal
lubricants business; Unocal commercial and
industrial petroleum products business;
Unocal's credit card (including co-branded
card) systems
Book earnings impact of sale Estimated $375 million aftertax loss for
Unocal.
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
UNOCAL CORPORATION
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(Registrant)
Date: November 18, 1996 By: /s/ CHARLES S. MCDOWELL
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Charles S. McDowell,
Vice President and Comptroller
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