Dominion Resources Inc. (DRI) made its third move of 1999 andits second in less than a week to position itself as a major gasand power player in the Northeast and Midwest. Following on theheels of Monday’s announcement that DRI will acquire ConsolidatedNatural Gas (CNG), subsidiary Dominion Energy said Wednesday itwill make a $34 million (C$50 million) cash offer for RemingtonEnergy Ltd., a publicly traded gas E&P company headquartered inCalgary, AB.

Including assumed debt, the transaction has a total value ofabout $261 million (C$390 million). Dominion Energy of Richmond,VA, the power and natural gas subsidiary of DRI, will have NorthAmerican reserves exceeding 1 Tcfe including Remington. Productionwill exceed 350 MMcfe/d.

The acquisition, which will be immediately accretive toearnings, is the third investment this year by DRI or DominionEnergy to position DRI and its subsidiaries as major providers ofpower and gas in U.S. Midwest and Northeastern markets, home to 40%of the nation’s energy demand.

Monday DRI said it will acquire all shares of Pittsburgh-basedCNG to become the nation’s fourth largest power and gas company. OnJan. 20, Dominion Energy announced the acquisition of San JuanPartners, holder of working interests in the San Juan Basin of NewMexico, the majority interest in a coal seam gas royalty trust, andother oil and gas interests.

In December, Remington said it retained FirstEnergy CapitalCorp. to assist in the possible sale of the company. On Feb. 10,Remington disclosed it had entered exclusive negotiations with “asubstantial oil and gas producer.” One week earlier, followingunusual trading patterns of its stock, the company said it had “anumber of proposals from interested parties.” Remington had a lossfor the nine months ended Sept. 30, 1998 of $2.2 million comparedto earnings of $4.9 million for the prior-year period.

The Canadian gas subsidiary of Dominion Energy is to acquire allcommon shares of Remington. The offer is expected to be mailed toRemington shareholders by March 8 and is expected to remain openfor 21 days with expiration at the end of March.

When the offer is completed, the addition of Remington toDominion Energy’s portfolio will represent the company’s secondexpansion into the Western Canadian Sedimentary Basin. Last year,Dominion Energy acquired 100% of Archer Resources Ltd., which nowoperates under the name Dominion Energy Canada Ltd.

“When we combine this planned acquisition with our acquisitionlast month of San Juan Partners, Dominion Energy increases itsproved reserves to more than 1 Tcfe and boosts daily production by50%,” said Dominion Energy CEO Thomas N. Chewning. “Viewed as partof Dominion Resources’ planned combination with ConsolidatedNatural Gas, our onshore reserve base will serve to balance theoffshore reserves developed by CNG under its highly successfulprogram. Our combined companies will own reserves with geographicand geological diversity.”

G.E. Lake Jr., senior vice president-oil and gas operations ofDominion Energy, said Remington fits well with Dominion’s long-termgrowth strategy. “It’s a logical addition to our group ofbusinesses. We are acquiring significant future developmentpotential and adding a second core area of operations to ourexisting growth platform in Canada. It represents an importantcomponent of the combined company now planned by DRI and CNG.”

The Remington deal gives Dominion a holding in the AlliancePipeline and moves the company into northeast British Columbia, amajor gas supply region. Dominion Energy said it intends to retainthe majority of Remington employees.

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