Dominion, which is selling off its extensive North American exploration and production (E&P) businesses, on Thursday said it will merge subsidiary Consolidated Natural Gas Co. (CNG) into Dominion Resources Inc. to streamline its corporate structure.
The merger is targeted for later this year, the company said. Following the merger, Dominion will assume all obligations related to CNG debt, as well as any other financial obligations, including guarantees. Also, first-tier CNG subsidiaries will become first-tier Dominion subsidiaries instead of second-tier subsidiaries.
"This move will simplify our corporate structure and help us operate more efficiently," said Dominion CEO Thomas F. Farrell II. "It will reduce the number of legal filings, save audit expenses and enable us to conduct all public financing activities through two entities -- Dominion Resources Inc. and Virginia Electric and Power Company -- instead of three. As we divest E&P assets this year, it is an appropriate time to take this simplifying step."
Dominion purchased CNG in 1999 (see Daily GPI, May 13, 1999).
Earlier this week, Paramount Energy Trust and Baytex Energy Trust, both headquartered in Calgary, agreed to buy Dominion's Canadian properties for US$583 million (see Daily GPI, May 30). In late April, the company sold its offshore E&P business to a subsidiary of Italy's Eni SpA for $4.76 billion (see Daily GPI, May 1).
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