UNOCAL TO SELL CRUDE, GAS ASSETS IN $500 MILLION DEAL WITH TORCH

UNOCAL TO SELL CRUDE, GAS ASSETS IN $500 MILLION DEAL WITH TORCH

Unocal Corp., a company that traces its history back to the beginnings of California's oil industry, said Tuesday it had reached a preliminary agreement to sell its crude oil and natural gas assets in the state for more than $500 million.

Los Angeles-based Unocal said its Union Oil Co. of California subsidiary and Houston-based Torch Energy Advisors Inc. reached agreement in principle on the sale price for Unocal's crude oil and natural gas holdings in California. Torch was one of five groups of companies that submitted proposals in late May.Unocal also said that beginning in 1998, it could receive further payments, contingent upon the price per barrel received by Torch from the properties' future oil production.

''Our strategic focus today is on natural gas development in the expanding markets of Asia and exploiting our gas reserve inventory in the Gulf of Mexico," Roger Beach, Unocal chairman, said in a statement. "We have many opportunities, and the proceeds from this sale would be directed to projects that offer the highest growth potential."

The sales negotiations involve Unocal's interests in 69 oil and gas fields, including 11 producing oil platforms off the California coast in state and federal waters.

Torch is an asset management company offering services through investment management, property management, and oil and gas marketing. Torch manages more than $1.5 billion in oil and gas assets on behalf of its clients.

The two companies are continuing negotiations toward a final sale agreement.