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Fitch Ratings Upgrades Pure Resources Sr Unsecured Debt To 'BBB'.

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Fitch Ratings has upgraded the senior unsecured debt rating of Pure Resources (Pure) to 'BBB' from 'BBB-' and removed the rating from Rating Watch Positive. The upgrade follows the announcement that Unocal Corporation (Unocal) has completed its acquisition of Pure. Fitch currently rates Unocal's senior unsecured debt 'BBB+', trust convertible preferred securities 'BBB' and commercial paper 'F2'. The one-notch difference in the senior unsecured ratings of Unocal and Pure is based on the implicit support by Unocal of the Pure debt without a guarantee. The Rating Outlook for Unocal and Pure is Stable.

On Oct. 30, Unocal Corporation said that the company's exchange offer for shares of Pure Resources, Inc. had been successful. Unocal accepted for exchange 16,634,625 Pure shares. The exchange offer results in Union Oil Company of California (Union Oil), a subsidiary of Unocal, owning a total of 49,343,692 shares, representing approximately 97.5% of the outstanding Pure shares. Each share of Pure common stock that was tendered was exchanged for 0.74 shares of Unocal common stock. Unocal also said that it completed the short-form merger of a wholly owned subsidiary of Union Oil into Pure. In that transaction, each Pure share other than those owned by Union Oil were converted into the right to receive 0.74 shares of Unocal common stock. Based on the closing price of Unocal on Oct. 30, 2002 the transaction was valued at approximately $345.2 million.

Unocal is one of the world's largest independent oil and gas exploration and production companies, with worldwide reserves at year-end 2001 of approximately 1.8 billion barrels of oil equivalent (boe). Natural gas accounts for approximately 64% of the company's production mix. Unocal's core operating areas are Southeast Asia, the lower 48 states of the United States, Alaska, and Canada. Unocal is also involved in the carbon and minerals business and is a large producer of geothermal energy through its interests in the Philippines and Indonesia. Pure's reserves and operations are concentrated in the Permian Basin, the San Juan Basin, and the Gulf Coast. At year-end 2001, Pure had 245 million BOE of proven reserves, which were included in Unocal's results. Approximately 80% of the reserves were proven developed and 67% are natural gas.
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Publication:Business Wire
Geographic Code:1USA
Date:Nov 1, 2002
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