Chicago-based Peoples Energy decided to eliminate the middle manlast week, purchasing an interest in 25 oil and natural gasproducing wells in South Louisiana and the Texas Gulf Coast regionfrom NBB Energy Partners LLP. The $18 million purchase makesPeoples Energy an operator of oil and gas properties for the firsttime in its history, with complete production responsibilities forthe purchased wells.

Nearly 60% of the wells’ production is natural gas with thebalance mostly condensate. Before the purchase, Peoples EnergyProduction, the oil and gas production unit of the Chicago firmowned an interest in eight of the acquired wells. The propertiesare expected to provide energy resources for markets throughout theEast and Midwest with several pipeline connections in the region.

“This purchase represents a strategic expansion in the onshoreGulf Coast area, which is one of our targeted production region,”said President Tom Patrick. “The newly acquired reserves willprovide us with robust near-term income.” He said that PeoplesEnergy had invested more than $100 million in its oil and gasproduction 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 saidthat the company plans to continue its diversification even as itsbusiness grows throughout the Midwest.

“Our goal is to become the Midwest’s premier supplier of energyand energy-related services,” Terry said. “And we are well on ourway to realizing that vision, as evidenced by the success of ournew businesses: power generation, midstream services, retail energyservices and oil and gas production.”

The gas distribution business currently serves about 1 millionretail customers in Chicago and northeastern Illinois.

Carolyn Davis, Houston

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