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SEAGULL ENERGY ANNOUNCES EXECUTION OF DEFINITIVE PURCHASE AGREEMENT

 HOUSTON, Nov. 17 ~PRNewswire~ -- Seagull Energy Corporation (NYSE: SGO) today announced that is has executed a definitive purchase agreement to buy all of the outstanding common stock of Arkla Exploration Company from its parent, Arkla, Inc. (NYSE: ALG).
 The agreement calls for Seagull to pay approximately $402 million in cash, subject to customary purchase price adjustments, for Arkla Exploration, effective Sept. 1, 1992. The transaction has been approved by the boards of each company, but remains subject to various regulatory approvals. The parties hope to close before Dec. 31, 1992.
 The assets of Arkla Exploration consist almost exclusively of natural gas and oil reserves and developed and undeveloped lease acreage. As of Jan. 1, 1992, independent engineers estimated that Arkla Exploration's proved reserves totaled 635 billion cubic feet (BCF) of natural gas and 9.0 million barrels of crude oil and condensate.
 After accounting for eight months of production and various non-core dispositions, partially offset by additions, Seagull estimates that it is buying about 578 BCF of proved gas reserves and some 7.3 million barrels of proved liquids reserves.
 Lease acreage holdings include 159,000 net undeveloped acres and 268,000 net developed acres. Ninety percent of the reserves are concentrated in just two major basins in eastern Oklahoma, western Arkansas, east Texas and northern Louisiana. Approximately 75 percent of the reserves are concentrated in just seven major fields.
 "This is an extremely positive step forward for Seagull," said Chairman Barry J. Galt. "Not only have we been able to buy a large and attractive package of properties at the right price, but we've also satisfied several important criteria that we imposed on ourselves.
 "For instance," he added, "some 93 percent of the reserves are natural gas. Our average working interest in the seven major fields will exceed 60 percent. We will operate a majority (about 60 percent also) of the properties, including all of the major fields. There is significant development potential, plus a small portfolio of exploratory prospects. Obviously, we are enthusiastic about the long-term future of our new 'third front' of E&P activity in the Arkoma and Arklatex areas and our instantaneous status as a major player there."
 Operationally, Galt said Seagull expects to retain the services of a sizable group of current Arkla Exploration employees who have been active in managing the acquired properties. Those individuals will be headquartered in Shreveport, where Seagull plans to establish a meaningful presence.
 Seagull has obtained commitments to finance the acquisition from a group of major U.S. banks. A new credit facility, which will replace an existing $225 million revolving line of credit, will consist of a $475 million revolver and a three-year, $150 million term loan.
 "To put the acquisition in perspective, Seagull will nearly double its total assets and more than double its proved reserves of hydrocarbons," Galt explained. "As of the end of this year, our total assets will have climbed above $1 billion and our proved reserves will approximate one trillion equivalent cubic feet of natural gas.
 "These are very meaningful milestones for a growing company as young as Seagull," he stressed. "Just five years ago, our total assets were less that $300 million and our proved reserves were about 30 billion equivalent cubic feet of gas."
 In addition to its exploration and production activity, Houston- based Seagull is engaged in the transportation, distribution and marketing of natural gas, liquids products and petrochemicals, and natural gas processing.
 -0- 11~17~92
 ~CONTACT: Alan Payne of Seagull Energy Corporation, 713-951-4842~
 (SGO)


CO: Seagull Energy Corporation ST: Texas IN: OIL SU: TNM

SM -- NY027 -- 1726 11~17~92 10:04 EST
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Date:Nov 17, 1992
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