Dominion Finalizing Remington Purchase
Richmond, VA-based Dominion Energy Inc. is completing its purchase
of gas producer Remington Energy Ltd., of Calgary, AB in a deal valued
at nearly US$300 million that will give Dominion a stake in Alliance
Pipeline. Still to be completed is its $6.3 billion deal to buy
Consolidated Natural Gas (CNG) which was originally announced in
February just days before the Remington buyout was revealed (See Daily GPI, Feb. 25, 1999).
Dominion said it expects to pay about US$33 million for all of
Remington common shares. The company also is assuming about US$260
million in Remington debt.
"With the addition of Remington Energy to Dominion's portfolio
of natural gas assets, we advance our long-term growth strategy
with increased production and enhanced reserves in our fourth core
area of operations. This acquisition further strengthens our
platform to serve the growing energy needs of the
Midwest-to-Northeast quadrant of the U.S., which accounts for 40%
of the nation's demand for energy," said Dominion CEO Thomas N.
Dominion estimates its daily gas and oil production now totals
more than 350 MMcfe. Its reserves total about 1.2 Tcfe. The company
has operations in four core areas: Canada, Michigan, the
Appalachian Basin and the Rocky Mountain region. In addition to its
gas businesses, Dominion has ownership and operating interests in
24 competitive power facilities throughout the United States and
In December, Remington said it retained FirstEnergy Capital
Corp. to assist in the possible sale of the company. The company
had a loss for the nine months ended Sept. 30, 1998 of $2.2 million
compared to earnings of $4.9 million for the prior-year period.
Dominion Energy is the gas and competitive power subsidiary of
Dominion Resources Inc. (DRI), a US$18 billion holding company with
subsidiaries Virginia Power/North Carolina Power, Dominion Energy,
and Dominion Capital. Its Virginia-North Carolina utility is ranked
among the electric industry's 10 largest, serving more than 2
million customers from the Virginia suburbs of Washington, DC to
northeastern North Carolina's Barrier Islands.
The Remington and CNG deals, plus a third in the Southwest have
positioned DRI and its subsidiaries as major providers of power and
gas in U.S. Midwest and Northeastern markets, home to 40% of the
nation's energy demand. DRI said it will acquire all shares of
Pittsburgh-based CNG to become the nation's fourth largest power
and gas company. And, on Jan. 20, Dominion Energy announced the
acquisition of San Juan Partners, holder of working interests in
the San Juan Basin of New Mexico, the majority interest in a coal
seam gas royalty trust, and other oil and gas interests.
The addition of Remington to Dominion Energy's portfolio will
represent the company's second expansion into the Western Canadian
Sedimentary Basin. Last year, Dominion Energy acquired 100% of
Archer Resources Ltd., which now operates under the name Dominion
Energy Canada Ltd. Dominion Energy said it intends to retain the
majority of Remington employees.
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