In the deal set to close August 31, Enron Corp will reduce its stake in the subsidiary Enron Oil and Gas Co from about 82.27 million shares, or 54 per cent, to 20 million shares, or less than 13 per cent. It will retain the unit's Asian operations in exchange for $ 600 million.

All Enron officers currently on the EOG board of directors will resign their positions as EOG Resources Inc, as it will be called, becomes a major stand-alone independent producer. "While EOG's North American operations are among the best in the industry, they are no longer strategic to Enron's North American energy businesses, as we have ready access to gas supplies in this well-developed market," Enron chairman Kenneth L Lay said in a statement.

"The China and India operations provide valuable supplies to meet growing energy demandin these regions and are very strategic to our international activities."

Other than the Asian operations, which will support Enron's large presence there, Enron will be out of the exploration and production business. The company is concentrating on energy and communications marketing and other pursuits, such as facilities management.

"The transaction also will remove the uncertainty of our ownership status and will provide eog with greater access to both debt and equity capital with which to grow its businesses," EO chairman Forrest E Hoglund said.

Though EOG's operations will be limited to North America and Trinidad after the sale, spokesman A H Davis said it will continue to explore business opportunities worldwide. EOG primarily produces natural gas, though Davis said the company does operate some oil wells.

For Enron, the deal provides cash that can be used to pay down debt or invest in more profitable enterprises, Merrill Lynch analyst Donato J Eassey said.

In addition to providing cash forEnron, the transaction also allows it to reduce exposure to oft-volatile oil and gas prices, Eassey said.