Crown Central Petroleum Corp. of Baltimore said yesterday that it has agreed to sell the bulk of its oil and gas exploration and production division to Amoco Production Co. and affiliates of Cross Timbers Oil Co. for $166 million.
The sale of the capital-intensive exploration and production business will allow the company to concentrate more on developing its retailing operations in the southeastern United States, said William R. Snyder, vice president for administration.
Crown, which operates a 100,000-barrels-per-day refinery on the Houston Ship Channel, has been expanding its retailing. In 1983, the company bought two chains of convenience stores, Fast Fare and Zippy Mart, from Sun Oil Co.
Crown operates about 470 convenience stores in five southeastern states -- North and South Carolina, Georgia, Alabama and Florida -- and sells gasoline in about 80 percent of those stores.
Crown also operates approximately 250 large gas stations in Maryland, Virginia, North and South Carolina, Georgia and Alabama.
Last year the company expanded its retail marketing still further with the acquisition of Maryland's BP stations.
Low oil costs have made the oil and gas exploration and production business a difficult one in which to make money in recent years.
Crown suffered $11.16 million in losses in 1986 through that division, which offset profits in other divisions. Crown has been in the exploration and production business since the 1930s.
This year increasing oil prices have begun to produce profits in Crown's exploration and production division, while the company's refining and marketing divisions have suffered losses.
In the first nine months of 1987, Crown lost $21 million, compared with a $9.7 million loss in the first nine months of 1986.
"In the absence of satisfactory profits, it's very difficult for us to make the large capital investments in exploration and production to maintain production and find new oil reserves," said Snyder.
Crown's production is equal to only about 3 percent of the company's needs within the United States and is not used for the company's refinery.
The exploration and production division has accounted for less than 4 percent of revenue in the past three years.
The company will use the proceeds of the sale to reduce long-term debt and to concentrate its resources on its marketing and convenience store business.
"With the U.S. becoming more dependent on foreign crude oil production for its raw materials, we just feel this gives us a greater flexibility and a greater utilization of the assets of the company," said Snyder.
The company's oil and gas properties are in the southwestern United States and the Gulf of Mexico.