CMS Energy Corp. announced last Wednesday it has filed for aninitial public offering (IPO) in the first quarter next year for upto 49% of the stock in its exploration and production subsidiary,CMS Oil and Gas Co. The sale, in which CMS hopes to realize $400million, is part of a “value enhancement” program announced lastmonth aimed at strengthening its balance sheet.

Last week’s filing of an S-1 registration with the Securitiesand Exchange Commission adds $300 million of CMS Oil and Gas Co.common stock to $100 million that had been on file since 1995 undera previous registration.

At the end of the third quarter, CMS O&G had 212 millionbarrels of oil equivalent proved reserves which included 724 Bcfand 91 million barrels of oil. The unit operates in four states andseven foreign countries. Its 3Q operating earnings were $13million, up from $4 million in the third quarter of 1999, due tohigher oil and gas prices, partially offset by lower productionresulting from the sale of gas reserves in Michigan and oilreserves in Ecuador.

CMS said earlier it plans to accelerate the issuance of $300million of CMS Energy common stock, which had previously been plannedfor mid-year 2001, with the combined actions expected to generateabout $800 million in cash and approximately $450 million inequity. The cash will help reduce debt, and will supplement the $1.4billion asset divestiture program. CMS already has divested $900million in assets to help reach its goal (see Daily GPI, Oct. 4). CMS’s stock price has beensteadily strengthening from a low around $16 in March to $27 andchange at last Wednesday’s close.

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