Filed by Unocal Corporation
Pursuant to Rule 425 under the Securities Act of 1933
Subject Company: Pure Resources, Inc.
Commission File No. 001-15899
Dated: October 2, 2002
UNOCAL
2141 Rosecrans Avenue, Suite 4000
El Segundo, California 90245
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NEWS RELEASE
Contact: Barry Lane (Media)
310-726-7731
Robert Wright (Investors)
310-726-7665
Unocal Increases Exchange Ratio of Exchange Offer for Pure Resources Shares
EL SEGUNDO, Calif., Oct. 2 -- Unocal Corporation (NYSE: UCL) today said its
Union Oil Company of California subsidiary is increasing the exchange ratio
of the pending exchange offer for shares of Pure Resources, Inc. (NYSE: PRS) to
0.70 shares of Unocal common stock for each share of Pure's common stock not
currently owned by Unocal.
Unocal will file amended offering documents with the U.S. Securities and
Exchange Commission shortly. Effective immediately, the exchange offer has been
extended until 12:00 midnight, New York City time, on Thursday, Oct. 17, 2002.
Unocal also said that it is engaged in discussions with members of Pure's senior
management to obtain their agreements to surrender all put rights relating to
shares of Pure common stock and options to purchase Pure common stock, in
exchange for a further increase in the exchange ratio for all Pure stockholders
to 0.74 shares of Unocal common stock for each share of Pure common stock.
Unocal said that the increased exchange ratio of 0.70 represents the highest
ratio that Unocal will offer in a transaction not involving the surrender of the
put rights. The proposed further increase in the exchange ratio to 0.74
represents the highest ratio that will be offered if satisfactory agreements are
reached with the holders of the put rights to surrender those rights for no
additional consideration. There can be no assurance that such agreements will be
reached.
Based on Unocal's closing stock price on Oct. 1, 2002, the revised 0.70 exchange
ratio and the potential 0.74 exchange ratio represent a 28.1-percent and
35.4-percent premium, respectively, to Pure's closing price immediately prior to
the announcement of Unocal's exchange offer on Aug. 20, 2002.
"The amendment to increase our exchange ratio to 0.70, and the proposal we are
discussing to further increase the exchange ratio if all the put rights are
surrendered, represent the highest exchange ratios we will offer," said Charles
R. Williamson, Unocal's chairman and chief executive officer. "If neither of
these alternatives result in our owning at least 90 percent of the outstanding
shares of Pure common stock, our offer will expire, the transactions
contemplated by the offer will not be completed, and we will continue to hold
our 65 percent interest in Pure."
The offer remains subject to conditions included in the offer as commenced on
Sept. 5, 2002, including the condition that a sufficient number of Pure shares
are tendered to result in Union Oil owning at least 90 percent of Pure's
outstanding common stock. Unocal's revised offer will be subject to the
condition that the injunction preventing consummation of our offer, which was
issued yesterday by the Delaware Chancery Court, is lifted or is otherwise
inapplicable and Unocal and Union Oil are satisfied with the status of the
litigation against them that is pending in the Delaware Chancery Court,
including any appeals. Unocal also said that the mini-tender offer announced by
TRC Capital on Sept. 4, 2002, did not trigger a condition of Unocal's offer.
Unocal also reported that it has been advised by the depositary for the exchange
offer that, as of Oct. 1, 2002, the number of Pure shares that have been
tendered and not withdrawn is 450,404.
Additional information
A prospectus, which is part of the Unocal Registration Statement on Form S-4,
and related exchange offer materials, including a letter of transmittal, has
been mailed to stockholders of Pure. Investors and stockholders of Pure are
urged to read all of these documents carefully and the Amended Registration
Statement and Schedule TO when they become available. These documents contain
important information about the transaction and should be read in connection
with making a decision with respect to the exchange offer. Unocal has filed its
Registration Statement on Form S-4 and a Schedule TO with the Securities and
Exchange Commission (SEC). Investors and stockholders are able to obtain free
copies of these documents through the SEC's web site, www.sec.gov. For
additional information on the exchange offer or copies of any of the offering
materials, stockholders may contact D.F. King & Co., Inc., at 800-769-6414. In
addition, Merrill Lynch is the dealer-manager for the exchange offer and may be
contacted at 866-276-1462.
In addition to the amended Registration Statement on Form S-4, Schedule TO,
prospectus and related exchange offer materials, both Unocal and Pure file
annual, quarterly and special reports, proxy statements and other information
with the SEC. You may read and copy any reports, or other information filed by
Unocal or Pure at the SEC public reference room at 450 Fifth Street, NW,
Washington, D.C. 20549, or at any of the SEC's other public reference rooms in
New York City, N.Y., and Chicago, Ill. Please call the SEC at 800-SEC-0330 for
further information on the public reference rooms. The SEC filings by Unocal and
Pure are also available to the public from commercial document- retrieval
services and at the SEC web site.
About Unocal Corporation
Unocal is one of the world's largest independent natural gas and crude oil
exploration and production companies. Based in El Segundo, Calif., Unocal's
principal production operations are in North America, Asia, and the North Sea.
Unocal is also one of the world's largest producers of geothermal energy with
operations in Indonesia and the Philippines. More information about the company
is available at www.unocal.com .
About Pure Resources, Inc.
Pure is an independent exploration and production company that develops and
produces oil and natural gas in the Permian Basin, the San Juan Basin, the Gulf
Coast and the Gulf of Mexico. The company also owns an undivided interest under
approximately 6 million gross fee mineral acres throughout the Southern Gulf
Coast region of the U.S. Pure was formed in May 2000 through the combination of
Titan Exploration, Inc., and the Permian Basin business unit of Unocal
Corporation.
This news release contains certain forward-looking statements about future
business transactions involving Unocal and Pure. These statements are not
guarantees of future performance and involve certain risks and uncertainties
that are difficult to predict. The statements are based upon Unocal's current
expectations and beliefs and are subject to a number of known and unknown risks
and uncertainties that could cause actual results to differ materially from
those described in the forward looking statements. Actual results could differ
materially from what is expressed or forecasted in this news release. Those risk
factors are discussed in the Unocal and Pure Annual Reports on Form 10-K, in
each case as amended, and subsequent reports that have been filed by the
companies with the U.S. Securities and Exchange Commission.