NATIONAL FUEL <NFG> PROPOSES ARGO REORGANIZATION
National Fuel Gas Co said it has
proposed a plan of reorganization for <Argo Petroleum Corp>.
    The proposal calls for National Fuel's Seneca Resources
Corp subsidiary to receive 75 pct of Argo's principal producing
and undeveloped oil and gas assets in return for refinancing
Argo's debt to Seneca.
    The plan calls for Seneca to made an additional 500,000 dlr
advance to Argo, National Fuel Gas said.
    National Fuel Gas said it reorganzation was proposed in a
term sheet signed by Seneca, Argo and representatives of Argo's
unsecured creditors committee. Seneca became Argo's principal
secured creditor in November when it purchased notes totaling
about 40 mln dlrs from Continental Illinois National Bank and
Trust Co for about 35 mln dlrs.
    National Fuel Gas said the additional advance to Argo would
allow it to capitalize, together with other assets, a new
company for its existing shareholders.
    National Fuel Gas said the plan calls for Argo's existing
secured debt to be refinanced in an 8,875,000 dlr refinancing
note and a 75 pct interest in Argo's principal oil and gas
properties.
    Seneca and Argo will enter into a venture to be 75 pct
owned by Seneca and 25 pct by Argo to develop their jointly
owned properties.
    In addition to restructuring and refinancing Argo's
existing debt, Seneca will provide Argo with a two mln dlr
revolving line of credit to finance its 25 pct share of the
venture's development costs, National Fuel Gas said.
    It said the proposed plan calls for Argo oil and gas assets
not subject to the venture to be transferred to a new
corporation. Existing Argo shareholders will receive all the
new company's common stock while its unsecured creditors will
receive 100 pct of the new capital stock of Argo in exchange
for their claims against the company.
 Reuter
