Peoples Becomes a Producer With $18 M Purchase
Chicago-based Peoples Energy decided to eliminate the middle man
last week, purchasing an interest in 25 oil and natural gas
producing wells in South Louisiana and the Texas Gulf Coast region
from NBB Energy Partners LLP. The $18 million purchase makes
Peoples Energy an operator of oil and gas properties for the first
time in its history, with complete production responsibilities for
the purchased wells.
Nearly 60% of the wells' production is natural gas with the
balance mostly condensate. Before the purchase, Peoples Energy
Production, the oil and gas production unit of the Chicago firm
owned an interest in eight of the acquired wells. The properties
are expected to provide energy resources for markets throughout the
East and Midwest with several pipeline connections in the region.
"This purchase represents a strategic expansion in the onshore
Gulf Coast area, which is one of our targeted production region,"
said President Tom Patrick. "The newly acquired reserves will
provide us with robust near-term income." He said that Peoples
Energy had invested more than $100 million in its oil and gas
production business in the past two years, and said that it had
"achieved financial results that have exceeded our expectations."
The company is definitely on the move. Chairman Dick Terry said
that the company plans to continue its diversification even as its
business grows throughout the Midwest.
"Our goal is to become the Midwest's premier supplier of energy
and energy-related services," Terry said. "And we are well on our
way to realizing that vision, as evidenced by the success of our
new businesses: power generation, midstream services, retail energy
services and oil and gas production."
The gas distribution business currently serves about 1 million
retail customers in Chicago and northeastern Illinois.
Carolyn Davis, Houston
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