Toreador Resources selling U.S. mineral, royalty assets

Plans to use $45 million proceeds to develop international prospects

Allen Baker

Petroleum News Contributing Writer

Toreador Resources Corp. is selling its U.S. mineral and royalty assets in a $45 million sale that cuts the Dallas company’s resource base by 14 percent.

The company announced the sale Dec. 10, but didn’t name the buyer. According to Toreador executives, the deal has been approved by boards of both companies. It’s expected to close in January.

The sale will allow the company to concentrate on its overseas prospects.

“In addition to improving our balance sheet, this asset sale will provide us with the necessary funds to implement our three-year operations plan, which balances exploration endeavors, particularly in Turkey’s Black Sea and France, with French and Romanian development and rehabilitation work,” said a statement from G. Thomas Graves III, Toreador’s president and CEO.

Graves figures that Toreador can replace a third of the lost U.S. production in 2004 from its French fields alone, and all of it by 2005.

The mineral and royalty package being sold covers about 2.6 million gross acres, or 1.4 million net acres, in Alabama, Arkansas, California, Kansas, Louisiana, Michigan, Mississippi and Texas.

Toreador isn’t leaving the U.S. oil patch entirely. The company will retain its working interest portfolio, which covers fields in five states, and may add to it, executives say. That portfolio accounts for about a tenth of the company’s proved oil and gas reserves.

The company expects to cut its debt by about $30 million as a result of the sale, and it will book a gain of about $32 million before taxes in the first quarter of next year.

Toreador holds interests in oil and gas properties in France, Romania, Turkey and Trinidad, as well as the U.S. portfolio.