Toreador Sells its' U.S. Properties for $19.1 Million
Continuing its policy of divesting non-core assets, Toreador Resources has entered into an agreement with RTF Realty, Inc. of Dallas, Texas to sell all of its U.S. oil and gas properties for approximately $19.1 million in cash on an "as is, where is" basis, with an effective date of September 1, 2007. Net proceeds from the sale will be added to working capital and used for possible modest debt repayment, to fund the company's ongoing development program in Turkey and for other strategic initiatives.
Toreador President and Chief Executive Officer, Nigel Lovett, said, "The sale of these mature, non-operated properties with no exploration or development potential completes the divestiture of the company's non-core, domestic assets and allows us to focus exclusively on our international operations. The proceeds from the sale, when combined with our cash resources and increasing cash flow, position us well to fund our share of the future development in the South Akcakoca Sub-basin offshore Turkey. Preliminary planning is underway to develop our large gas discoveries in the deeper water portion of the SASB as soon as practical. Exploiting the potential of the deeper waters of this project area and initiating production from the second phase of development is our principal focus at this time. Another area of interest is the Thrace portion of the Black Sea, where we have just spudded an exploratory well with our 50% partner, Hema, the large Turkish industrial company."
The U.S. properties, which primarily consist of non-operated working interests in approximately 700 wells in five states, had proved reserves at the end of 2006 of approximately 700 thousand barrels of oil and 4.1 billion cubic feet of gas, or 1.4 million barrels of oil equivalent. The book value of the properties was approximately $10.3 million, or approximately 4% of the aggregate book value of the company's oil and gas properties. A gain of $9.0 million is expected be recorded on the sale in the company's third quarter results. Taxes due on the gain are expected to be offset by tax loss carryforwards. Toreador expects the transaction to close by August 31.
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