Continuing to unload noncore assets for solid profits in preparation for its liquefied natural gas (LNG), gas storage and pipeline projects coming to fruition in the next three years, Sempra Energy announced Monday it has agreed to sell its exploration and production subsidiary, Sempra Energy Production Co. (SEPCO) to PEC Minerals LP for approximately $225 million in cash. Sempra said it expects to close the deal next momth.
Sempra expects to record an after-tax gain of approximately $110 million from the sale as part of discontinued operations. It said the cash proceeds will be used to help fund Sempra's other capital projects, such as LNG receipt terminals, new interstate natural gas transmission pipelines and gas storage facilities.
The E&P unit for Sempra is a carry over from the merger of Los Angeles-based Pacific Enterprises with San Diego-based Enova to form Sempra in mid-1998. Pacific Enterprises owned a Dallas-based unit that became SEPCO after the merger, including ownership of mineral rights over 570,000 net acres and executive rights to more than 190,000 net acres in 31 states, along with holding interests in third-party natural gas and oil wells and ownership in 6,000 surface acres in five states.
PEC Minerals LP is owned by Jetta Operating Company, Trevor Rees-Jones, and Providence Energy Corp.
The private investment banking firm, Petrie Parkman & Co., acted as Sempra's financial advisor on this transaction.
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