Along with the much ballyhooed public offering by Nymex Holdings Inc. on Friday (see related story), utilities giant Constellation Energy Group Inc. (CEG) spun off its U.S.-based exploration and production (E&P) partnership last week to modest success. Tightly held midstream operator Targa Resources Inc. also announced plans for an offering next year of its considerable processing assets in North Texas.

CEG’s spin off of Constellation Energy Partners LLC on Wednesday raised $94.5 million on 4.5 million common units, at the high end of its forecast to earn between $19 and $21 per unit. The partnership was formed as a subsidiary of CEG in February 2005, and it plans to maintain its current strategy: acquire, develop and exploit oil and natural gas properties and related midstream assets. The assets now consist primarily of coalbed methane reserves, located in the Robinson’s Bend Field in the Black Warrior Basin of Alabama (see NGI, Aug. 14).

CEG’s initial public offering (IPO) is expected to be completed by Monday. Global Markets Inc. and Lehman Brothers Inc., acting as joint underwriters, were granted a 30-day option to purchase up to an additional 675,000 common units at the same price to cover any overallotments. The E&P will trade on the New York Stock Exchange under the ticker symbol “CEP.” Baltimore-based CEG will own 59% of the E&P, and it will pay profits in the form of a 9% annual dividend.

Targa Resources, based in Houston, is planning an offer of 16.8 million common units of its North Texas midstream assets, which include 3,950 miles of integrated natural gas gathering pipelines, two natural gas processing plants and a fractionator in the Fort Worth area. No date was announced for the spin off.

The proposed partnership, Targa Resources Partners LP, initially will operate in the Forth Worth basin, which is the center of the Barnett Shale gas production growth in Texas. The limited partnership plans to gather, process and sell gas, with initial operations in the Fort Worth area. As currently filed with the Securities and Exchange Commission, the common units will represent 58.1% of the outstanding equity of Targa Resources Partners, or 61.4% if the underwriters exercise in full their over-allotment option. Targa will indirectly own the partnership’s remaining equity interests.

Citigroup, Goldman, Sachs & Co., UBS Investment Bank and Merrill Lynch & Co. will act as joint book-running managers for Targa, and they will be allowed to purchase up to an additional 2.52 million common units. The partnership plans to use proceeds form the offering to establish its operations and retire inter-company debt with Targa. In turn, Targa will use the funds it receives to reduce its debt.

Targa was created two years ago, initially with an investment by private equity investor Warburg Pincus (see NGI, April 5, 2004). Its biggest investment to date was the $2.475 billion purchase of Dynegy Inc.’s midstream operations last year (see NGI, Nov. 7, 2005).

Several other energy-related IPOs have debuted in the past few weeks.

Los Angeles-based BreitBurn Energy Partners LLP, whose 29.7 MMboe of proved reserves are concentrated in the Los Angeles Basin and in the Big Horn and Wind River Basins of Wyoming, was launched by Calgary-based Provident Energy Trust in October. BreitBurn’s initial 6 million units sold for around $18.20/unit; it was trading at around $19.50 on Wednesday. BreitBurn trades on the Nasdaq Global Market under the symbol “BBEP.”

And Houston-based EV Energy Partners LP debuted on Oct. 1. Its 3.9 million units sold for about $20/unit; it was selling for about $21.69 at midday Wednesday. General partner is EV Energy GP LP, and its predecessors were controlled by EnerVest Management Partners Ltd. EV Energy owns oil and gas properties and related assets in North Louisiana, the Appalachian Basin and West Virginia, and it trades on Nasdaq under the symbol “EVEP.”

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