Dominion Finalizes Second Canadian Purchase
Richmond, VA-based Dominion Energy stretched across the Continent to
complete its purchase of gas producer Remington Energy Ltd., of Calgary,
AB in a deal valued at nearly US$300 million that will give Dominion a
stake in Alliance Pipeline. Still to be completed is its $6.3 billion agreement
to buy Consolidated Natural Gas (CNG), which was originally announced in
February, just days before the Remington buyout was revealed (See
NGI March 1, 1999).
Dominion said it expects to pay about US$33 million for all of Remington's
common shares. The company also is assuming about US$260 million in Remington
debt. The addition of Remington is the company's second expansion into
the Western Canadian Sedimentary Basin. Last year, Dominion Energy acquired
100% of Archer Resources Ltd., which now operates under the name Dominion
Energy Canada Ltd.
"With the addition of Remington Energy to Dominion's portfolio
of natural gas assets, we advance our long-term growth strategy with increased
production and enhanced reserves in our fourth core area of operations.
This acquisition further strengthens our platform to serve the growing
energy needs of the Midwest-to-Northeast quadrant of the U.S., which accounts
for 40% of the nation's demand for energy," said Dominion CEO Thomas
Dominion estimates its daily gas and oil production now totals more
than 350 MMcfe. Its reserves total about 1.2 Tcfe. The company has operations
in four core areas: Canada, Michigan, the Appalachian Basin and the Rocky
Mountain region. In addition to its gas businesses, Dominion has ownership
and operating interests in 24 competitive power facilities throughout the
United States and Latin America.
In December, Remington said it retained FirstEnergy Capital Corp. to
assist in the possible sale of the company. The company had a loss for
the nine months ended Sept. 30, 1998 of $2.2 million compared to earnings
of $4.9 million for the prior-year period.
Dominion Energy is the gas and competitive power subsidiary of Dominion
Resources Inc. (DRI), a US$18 billion holding company with subsidiaries
Virginia Power/North Carolina Power, Dominion Energy, and Dominion Capital.
Its Virginia-North Carolina utility is ranked among the electric industry's
10 largest, serving more than 2 million customers from the Virginia suburbs
of Washington, DC to northeastern North Carolina's Barrier Islands.
The Remington and CNG deals, plus a third in the Southwest have positioned
DRI and its subsidiaries as major providers of power and gas in U.S. Midwest
and Northeastern markets, home to 40% of the nation's energy demand. DRI
said it will acquire all shares of Pittsburgh-based CNG to become the nation's
fourth largest power and gas company. And, on Jan. 20, Dominion Energy
announced the acquisition of San Juan Partners, holder of working interests
in the San Juan Basin of New Mexico, the majority interest in a coal seam
gas royalty trust, and other oil and gas interests.
Dominion Energy said it intends to retain the majority of Remington
Joe Fisher, Houston
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