Chevron to Sell 13 Fields in Canada

Two Canadian trusts agreed Tuesday to buy 13 oil and natural-gas fields from ChevronTexaco Corp. for $793.6 million to boost reserves and cash flow.

Enerplus Resources Fund and Acclaim Energy Trust, both of Calgary, plan to sell fields in western Canada worth about $138 million to an oil and gas producer immediately after the purchase, which is expected by June 30, Enerplus said.

Chevron, based in San Ramon, Calif., issued its own statement and said it expected a significant gain on the deal.

The new fields will help the income trusts sustain production and monthly cash payments to investors, said Leslie Lundquist, who oversees Bissett Investment Management’s Income Fund and owns about 550,000 Enerplus units.

“You can’t expect an oil trust to increase its distributions every time it makes a property acquisition,” Lundquist said in a telephone interview from Calgary. “This looks more like replacing assets to try to extend the life of the investment, as opposed to giving all of the bang upfront.”

Shares of ChevronTexaco rose $1.50, or 1.7%, to $91.67 on the New York Stock Exchange. Trading of Enerplus and Acclaim units was halted in Toronto before the announcement.

In a conference call with analysts, Acclaim Chief Executive J. Paul Charron identified Paramount Resources Ltd., a Calgary-based oil producer, as the third participant in the transaction.

Paramount, in a statement, said it bought oil and gas assets in Alberta, northeastern British Columbia and the Northwest Territories for about $138 million.

Paramount did not identify the seller in the statement. Chief Financial Officer Bernard Lee, however, said in an interview that the assets were acquired from Enerplus.

Enerplus will pay about $340 million for wells that produce the equivalent of 11,500 barrels of oil a day, and Acclaim will pay $316 million for properties that produce the equivalent of about 17,000 barrels of oil a day.

Each of the trusts plans to sell equity to finance the purchase.

Chevron this month agreed to sell oil and gas properties in Texas, New Mexico and five other U.S. states to XTO Energy Inc. for $1.1 billion.

Canadian income trusts, which hold such assets as oil fields and pipelines, make payouts to unit holders based on cash flow. Such trusts accounted for about two-thirds of the money raised last year through Canadian equity sales.