Unocal bought for $18 billion

announced today that it is to acquire

, an independent natural gas and crude oil exploration and production company, in a stock and cash transaction valued at approximately $18 billion, including net debt.

"Unocal is a unique independent with supermajor assets that are an excellent fit with our existing portfolio and our long-term strategies -- to grow profitably in core upstream areas, build new legacy positions and commercialise our large undeveloped natural gas resource base," said Dave O'Reilly, ChevronTexaco Chairman and CEO.

According to a joint statement, the acquisition consideration is structured as 75 percent stock and 25 percent cash, providing an overall value of approximately $62 per share based on the closing price of ChevronTexaco stock on April 1.

Unocal shareholders may elect to receive either 1.03 shares of ChevronTexaco stock or $65 in cash for each share of Unocal stock. ChevronTexaco will issue approximately 210 million shares of ChevronTexaco stock and pay approximately $4.4 billion in cash. The company will also assume estimated net debt of $1.6 billion.

ChevronTexaco, one of the world's leading energy companies, expects disposition of assets following the close of the transaction to result in proceeds of more than $2 billion. Annual savings from operational synergies and reduced corporate expenses are estimated by ChevronTexaco at more than $325 million before tax.

ChevronTexaco expects oil-equivalent production from the combined portfolios during 2006 to average about three million barrels per day. Unocal's 1.75 billion barrels of oil-equivalent proved reserves would increase ChevronTexaco's reserve base as of the end of 2004 by about 15 percent.

The acquisition, which is subject to approvals by Unocal shareholders and certain regulatory agencies, is expected to close in six months.