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Phillips, Duke Postpone Field Services IPO

Phillips, Duke Postpone Field Services IPO

Duke Energy Field Services (DEFS), a wholly owned subsidiary of Duke Energy Corp. and Phillips Petroleum Co., announced the postponement of an initial public offering of common shares on Friday because of volatile stock market conditions. The company said shares will be offered to the public when market conditions are more favorable. In the meantime, DEFS will continue to be owned 69.7% by Duke Energy and 30.3% by Phillips.

DEFS is one of the nation's largest natural gas gatherers, and one of the largest producers and marketers of natural gas liquids. Duke Energy and Phillips completed the combination of their midstream assets into DEFS last month after complying with an order by the Federal Trade Commission to sell off nearly 3,000 miles of gas gathering lines in the Midcontinent region.

DEFS also recently acquire gathering and processing assets in Oklahoma jointly owned by Conoco and Mitchell Energy (see NGI, Dec. 20, 1999; Jan. 10, April 10). Its recent purchases cover midstream assets totaling $6 billion.

The FTC consent order, which is subject to final agency approval, determined the transactions would create competitive concerns in several counties in Kansas, Oklahoma and Texas. Duke is now in the process of divesting a total of 2,787 miles of gathering lines. The majority of the lines (2,250 miles) will be sold to Duke's joint venture partners, with 800 miles in Oklahoma already sold to Western Gas Resources Inc., co-owner of Westana Gathering Co., and 1,450 miles of gathering in the Austin Chalk area of Texas to be divested to Mitchell Energy, which co-owns the Ferguson-Burleson County Gas Gathering System. The remaining 537 miles of gathering lines are to be sold to FTC-approved buyers under the terms of the consent order.

DEFS, headquartered in Denver, operates in 11 states, including Wyoming, Colorado, Kansas, Oklahoma, New Mexico, Texas, Louisiana, Alabama and Mississippi, and along the Gulf Coast and in northwestern Alberta, Canada. DEFS now owns and operates 70 plants and 57,000 miles of pipeline.

Rocco Canonica

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