ChevronTexaco pays premium for Unocal

ChevronTexaco Pays More for Unocal Oil, Gas Reserves (Update1) Listen
April 5 (Bloomberg) — ChevronTexaco Corp. is paying more in its acquisition of Unocal Corp. than it ever has before for new oil and gas reserves, after exploration failures cut output for three consecutive years.

“This indicates they are having trouble replacing reserves at a reasonable price,” said Michael Cuggino, who oversees $340 million at Pacific Heights Asset Management LLC in San Francisco. “When the name of the game is replacing what you’re producing, you are going to acquire reserves wherever you can.”

Bloomberg