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Dominion Finalizes Second Canadian Purchase

Dominion Finalizes Second Canadian Purchase

Richmond, VA-based Dominion Energy stretched across the Continent to complete 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 agreement to buy Consolidated Natural Gas (CNG), which was originally announced in February, just days before the Remington buyout was revealed (See NGI March 1, 1999).

Dominion said it expects to pay about US$33 million for all of Remington's common shares. The company also is assuming about US$260 million in Remington debt. The addition of Remington is 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.

"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. Chewning.

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 Latin America.

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.

Dominion Energy said it intends to retain the majority of Remington employees.

Joe Fisher, Houston

©Copyright 1999 Intelligence Press, Inc. All rights reserved. The preceding news report may not be republished or redistributed in whole or in part without prior written consent of Intelligence Press, Inc.

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