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Virginia Gas Co. Explores Strategic Options

Virginia Gas Co. Explores Strategic Options

Virginia Gas Co., a small integrated natural gas company operating in the southwestern tip of Virginia, has selected Oppenheimer Corp. as its financial advisor to conduct an evaluation of the company, its subsidiaries and affiliates, and strategic alternatives available.

Michael L. Edwards, Virginia Gas president, said it will explore all viable strategic alternatives recommended by CIBC Oppenheimer Corp. and implement those that are in the best interest of the company's shareholders.

Virginia Gas, headquartered in Abingdon, is engaged in pipeline operation, natural gas storage, gathering, marketing and distribution services; natural gas exploration, production and well operation; and propane distribution.

The company showed net income for first quarter 1999 of $832,000 or 15/cents per common share. That compared with a 1Q98 net loss of $616,000, including an extraordinary charge of $832,000 for a bond refinancing. In 1998 Virginia Gas had net income before special items of $554,000 on revenues of $9.8 million compared to a net of $908,000 on revenues of $9.3 million in 1997.

Virginia Gas operates two storage fields, one of which is a high deliverability salt cavern in operation since 1996 with 650 MMcf of working gas capacity expected to go to 1 Bcf by the 2000/2001 heating season and ultimately to 10 Bcf. The company says its primary source of future growth is expected to come from its proposed Tidewater Intrastate Pipeline System, consisting of 480 miles of transmission pipeline extending across Virginia. The first 71.5 mile stage of the system connecting to the Saltville cavern is under construction.

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