Duke Energy Field Services (DEFS), a wholly owned subsidiary ofDuke Energy Corp. and Phillips Petroleum Co., announced thepostponement of an initial public offering of common shares onFriday because of volatile stock market conditions. The companysaid shares will be offered to the public when market conditionsare more favorable. In the meantime, DEFS will continue to be owned69.7% by Duke Energy and 30.3% by Phillips.

DEFS is one of the nation’s largest natural gas gatherers, andone of the largest producers and marketers of natural gas liquids.Duke Energy and Phillips completed the combination of theirmidstream assets into DEFS last month after complying with an orderby the Federal Trade Commission to sell off nearly 3,000 miles ofgas gathering lines in the Midcontinent region.

DEFS also recently acquire gathering and processing assets in Oklahoma jointly owned by Conoco and Mitchell Energy (see NGI, Dec. 20, 1999; Jan. 10, April 10). Its recent purchases cover midstream assets totaling $6 billion.

The FTC consent order, which is subject to final agencyapproval, determined the transactions would create competitiveconcerns in several counties in Kansas, Oklahoma and Texas. Duke isnow in the process of divesting a total of 2,787 miles of gatheringlines. The majority of the lines (2,250 miles) will be sold toDuke’s joint venture partners, with 800 miles in Oklahoma alreadysold to Western Gas Resources Inc., co-owner of Westana GatheringCo., and 1,450 miles of gathering in the Austin Chalk area of Texasto be divested to Mitchell Energy, which co-owns theFerguson-Burleson County Gas Gathering System. The remaining 537miles of gathering lines are to be sold to FTC-approved buyersunder the terms of the consent order.

DEFS, headquartered in Denver, operates in 11 states, includingWyoming, Colorado, Kansas, Oklahoma, New Mexico, Texas, Louisiana,Alabama and Mississippi, and along the Gulf Coast and innorthwestern Alberta, Canada. DEFS now owns and operates 70 plantsand 57,000 miles of pipeline.

Rocco Canonica

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