Fitch Revises Unocal's Rating Watch to Evolving

Fitch Ratings has revised the Rating Watch on Unocal Corporation (UCL; Unocal) to Evolving from Positive following the proposed offer by CNOOC Ltd. (CNOOC) to purchase Unocal in an all-cash transaction valued at $18.5 billion. The offer by CNOOC follows Chevron Corp.'s (CVX) offer for Unocal in April. Affected ratings include the following:
  • Senior unsecured debt 'BBB+';
  • Senior unsecured bank credit facility 'BBB+';
  • Trust convertible preferred securities 'BBB';
  • Commercial paper 'F2';
  • Pure Resources, Inc. senior unsecured 'BBB'.

This announcement affects approximately $3 billion in public debt.

Unocal is one of the world's largest independent oil and gas exploration and production companies, with worldwide reserves at year-end 2004 of approximately 1.8 billion barrels of oil equivalent (boe). Natural gas accounts for approximately 62% of the company's production mix. Unocal's core operating areas are Southeast Asia, the lower 48 states of the U.S., 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.