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) April 1, 1997
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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 2. Acquisition or Disposition of Assets.
On April 1, 1997 the following news release was issued:
UNOCAL COMPLETES SALE OF WEST COAST DOWNSTREAM ASSETS;
TO PURSUE HIGH-POTENTIAL NEW VENTURES IN ASIA, U.S. GULF COAST
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El Segundo, Calif., April 1 -- Unocal Corporation today said it had
completed the sale of its West Coast refining, marketing and transportation
assets to Connecticut-based Tosco Corporation. The sale is valued at
approximately $2 billion.
"The completion of this sale puts Unocal on the threshold of a new era,"
said Roger C. Beach, Unocal chairman and chief executive officer. "We are no
longer a mid-sized, integrated oil company. We are now the world's largest
independent exploration and production company -- first in reserves and
production -- with a strong focus on integrated project development."
Beach went on to say that Unocal's activities will be concentrated in areas
where the company is a proven high performer -- primarily exploration and
production operations in Asia and the U. S. Gulf of Mexico.
"We can now redeploy resources from slow-growth, low-return downstream
businesses, which averaged 5 percent a year return on assets, to high-return
operations and growth opportunities that offer potential returns of 15 to 20
percent a year," he said. Beach noted that about two-thirds of Unocal's $1.34
billion capital spending plan in 1997 is targeted to high-return overseas
projects.
The assets sold to Tosco were operated by Unocal's 76 Products Company
business unit. These assets include
Unocal's San Francisco, Santa Maria and Los
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Angeles refineries in California, which have a combined capacity of
251,000-barrels per day; various terminals, bulk plants and pipelines; worldwide
lubricants business; retail marketing business, including 1,100 controlled sites
and 250 branded, non-controlled sites in six Western states; commercial and
industrial petroleum products business; three oceangoing tankers; inventories of
hydrocarbon products; credit card systems; and other various assets.
Unocal will receive approximately $1.4 billion in cash (includes nearly
$400 million for inventories of crude oil and petroleum products) and shares of
Tosco common stock valued at approximately $400 million. Unocal expects to sell
the Tosco shares as soon as practicable.
The sale agreement also includes provisions for up to $250 million in
possible participation payments to Unocal should gasoline margins increase in
the next seven years.
The proceeds from the sale will be used to invest in new, high-growth
projects, reduce debt by about $800 million and buy back up to $400 million of
Unocal's common stock.
"With the proceeds from the sale, we will be able to strengthen our
balance sheet, add value for our stockholders, shift significant financial
resources to potentially high-return opportunities in the fast-growing economies
of Asia, and strengthen our resource base in the Louisiana/Gulf of Mexico
region," Beach said.
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TERMS OF SALE
Sales value Approximately $2 billion
$1 billion in cash
$400 million in Tosco common stock (14 million shares)
Nearly $400 million in cash for inventories
Participation payment: $250 million cap; 7-year term;
payment computed and paid semi-annually; portion of
increase in gasoline margins above base average
ASSET INFORMATION
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 Approximately 1,100 controlled sites and 250 non-controlled
marketing sites in California, Arizona, Nevada, Oregon,
business Washington and Hawaii
Ships Three oceangoing vessels (Sierra Madre, Blue Ridge
and Coast Range)
Other assets Various terminals, bulk plants and pipelines
and businesses Worldwide lubricants business
Commercial and industrial petroleum products business
Credit card systems (including co-branded card)
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Item 7. Financial Statements and Exhibits.
(c) Exhibits
2.1 Sale and Purchase Agreement for 76 Products Company, dated
December 14, 1996, between Union Oil Company of California and
Tosco Corporation (without attachments or schedules)
(incorporated by reference to Exhibit 2.1 to Unocal's Current
Report on Form 8-K dated December 16, 1996 and filed January 3,
1997, File No. 1-8483).
2.2 Stock Purchase and Shareholder Agreement, dated as of January 15,
1997, by and between Tosco Corporation and Union Oil Company of
California, together with form of Supplement No. 1 thereto
(incorporated by reference to Exhibit 2.2 to Unocal's Current
Report on Form 8-K dated December 16, 1996 and filed January 3,
1997, File No. 1-8483).
2.3 Amendment No. 1 and Supplement, dated as of March 31, 1997, to
Stock Purchase and Shareholder Agreement, dated as of January 15,
1997, by and between Tosco Corporation and Union Oil Company of
California (incorporated by reference to Exhibit C to Unocal's
and Union Oil Company of California's statement on Schedule 13D
relating to Tosco Corporation, dated and filed April 10, 1997,
File No. 1-7910).
2.4 Environmental Agreement, dated as of March 31, 1997, by and
between Union Oil Company of California and Tosco Corporation
(without schedules) (incorporated by reference to Exhibit 2.3 to
Unocal's Current Report on Form 8-K dated December 16, 1996 and
filed January 3, 1997, File No. 1-8483).
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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
(Registrant)
Date: April 10, 1997 By /s/ STANLEY Y. HANAOKA
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Stanley Y. Hanaoka
Assistant Comptroller
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UNOCAL CORPORATION
EXHIBIT INDEX
Exhibit 2.1 Sale and Purchase Agreement for 76 Products Company,
dated December 14, 1996, between Union Oil Company of
California and Tosco Corporation (without attachments or
schedules) (incorporated by reference to Exhibit 2.1 to
Unocal's Current Report on Form 8-K dated December 16, 1996
and filed January 3, 1997, File No. 1-8483).
Exhibit 2.2 Stock Purchase and Shareholder Agreement, dated as of
January 15, 1997, by and between Tosco Corporation and Union
Oil Company of California, together with form of Supplement
No. 1 thereto (incorporated by reference to Exhibit 2.2 to
Unocal's Current Report on Form 8-K dated December 16, 1996
and filed January 3, 1997, File No. 1-8483).
Exhibit 2.3 Amendment No. 1 and Supplement, dated as of March 31,
1997, to Stock Purchase and Shareholder Agreement, dated as
of January 15, 1997, by and between Tosco Corporation and
Union Oil Company of California (incorporated by reference
to Exhibit C to Unocal's and Union Oil Company of
California's statement on Schedule 13D relating to Tosco
Corporation, dated and filed April 10, 1997, File No.
1-7910).
Exhibit 2.4 Environmental Agreement, dated as of March 31, 1997, by
and between Union Oil Company of California and Tosco
Corporation (without schedules) (incorporated by reference
to Exhibit 2.3 to Unocal's Current Report on Form 8-K dated
December 16, 1996 and filed January 3, 1997, File No.
1-8483).
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