NGI The Weekly Gas Market Report / NGI All News Access

Coast Energy Buys Trading Assets of ERI Canada

Coast Energy Buys Trading Assets of ERI Canada

Coast Energy Canada Inc., a wholly owned subsidiary of Cornerstone Propane Partners L.P., finalized the purchase of the gas trading assets of ERI (Equitable Resources) Canada Ltd., effective Dec. 31. Terms of the acquisition were not disclosed.

With the acquisition, Coast Energy Canada will have an established, full-service gas trading and marketing company headquartered in Calgary. Expected annual revenues from this acquisition should exceed US$400 million based on last year's performance. Coast's portfolio now includes supplies from numerous producers and gathering companies within Canada and sales across all of North America. Coast expects to market about 800,000 MMBtu/d and estimates annual pre-tax earnings from this asset of about $2 million.

"We are extremely pleased to have consummated this acquisition and to have the entire team from ERI Canada join Coast Energy Canada," said Vincent J. Di Cosimo, Coast Energy Canada president and COO of Coast Energy Group (CEG). "This additional presence in Canada, combined with CEG's significant market and distribution in the U.S., substantially increases our ability to better service our customers across America." Di Cosimo said he was prevented from discussing marketed gas volumes because of an agreement with Equitable.

Equitable Resources is recording a total of $120 million in restructuring-related charges, the company said last month in a continuing effort started by CEO Murry Gerber to focus on core capabilities. Half of the charges will be accumulated because of severance, staff reductions and elimination of debt. Equitable expects a 20% employee reduction compared to mid-1998 staff levels. The other half of the charge is a result of the devaluation and consequent write-down of selected Gulf region gas and oil properties due to low commodity prices. Overall, Equitable expects the measures to reduce annual expenses by $20 million in 1999.

Joe Fisher, Houston

©Copyright 1999 Intelligence Press, Inc. All rights reserved. The preceding news report may not be republished or redistributed in whole or in part without prior written consent of Intelligence Press, Inc.

ISSN © 2577-9877 | ISSN © 1532-1266
Comments powered by Disqus