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PanCanadian's New Assets Add Production, Reach

PanCanadian's New Assets Add Production, Reach

Montana Power Co. is no longer in the oil and gas business, after closing last week on the sale of some of its energy assets to PanCanadian Petroleum Ltd. for $475 million in a combination of cash and credit. The assets include oil, natural gas and gas liquids exploration, production and marketing companies in the United States and Canada.

In March, Butte-based Montana Power announced it would sell all of its energy assets (see NGI, April 3). Along with the oil and gas assets, it plans to sell its independent power production businesses and electric and natural gas utility. It now plans to zero in on fiber-optic and wireless voice, data and video transport under its Touch American subsidiary.

Current daily production on the properties is 94 MMcf of gas and 3,800 bbl of oil and gas liquids, which will increase PanCanadian's daily gas production to more than 1 Bcf.

"The Montana Power oil and gas assets and staff have been smoothly and quickly incorporated into PanCanadian," said COO Dave Boone. "We have confirmed attractive investment opportunities on these properties, which complement our strong Canadian base. This marks the beginning of a major opportunity to apply our expertise to the exploration and development of new core properties on North America's Great Plains."

For the rest of the year, PanCanadian plans to complete fieldwork, including connecting more than 40 gas wells. It also wants to evaluate additional exploration and development opportunities. The Calgary company will incorporate most of the acquired properties into a new business unit, which will contain the properties and production in southern Alberta and Saskatchewan, northern Montana, Colorado, Wyoming and Oklahoma. The unit will maintain regional offices in Butte and Denver.

Carolyn Davis, Houston

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