Richmond, VA-based Dominion Energy Inc. is completing its purchaseof gas producer Remington Energy Ltd., of Calgary, AB in a deal valuedat nearly US$300 million that will give Dominion a stake in AlliancePipeline. Still to be completed is its $6.3 billion deal to buyConsolidated Natural Gas (CNG) which was originally announced inFebruary just days before the Remington buyout was revealed (See Daily GPI, Feb. 25, 1999).
Dominion said it expects to pay about US$33 million for all ofRemington common shares. The company also is assuming about US$260million in Remington debt.
“With the addition of Remington Energy to Dominion’s portfolioof natural gas assets, we advance our long-term growth strategywith increased production and enhanced reserves in our fourth corearea of operations. This acquisition further strengthens ourplatform to serve the growing energy needs of theMidwest-to-Northeast quadrant of the U.S., which accounts for 40%of the nation’s demand for energy,” said Dominion CEO Thomas N.Chewning.
Dominion estimates its daily gas and oil production now totalsmore than 350 MMcfe. Its reserves total about 1.2 Tcfe. The companyhas operations in four core areas: Canada, Michigan, theAppalachian Basin and the Rocky Mountain region. In addition to itsgas businesses, Dominion has ownership and operating interests in24 competitive power facilities throughout the United States andLatin America.
In December, Remington said it retained FirstEnergy CapitalCorp. to assist in the possible sale of the company. The companyhad a loss for the nine months ended Sept. 30, 1998 of $2.2 millioncompared to earnings of $4.9 million for the prior-year period.
Dominion Energy is the gas and competitive power subsidiary ofDominion Resources Inc. (DRI), a US$18 billion holding company withsubsidiaries Virginia Power/North Carolina Power, Dominion Energy,and Dominion Capital. Its Virginia-North Carolina utility is rankedamong the electric industry’s 10 largest, serving more than 2million customers from the Virginia suburbs of Washington, DC tonortheastern North Carolina’s Barrier Islands.
The Remington and CNG deals, plus a third in the Southwest havepositioned DRI and its subsidiaries as major providers of power andgas in U.S. Midwest and Northeastern markets, home to 40% of thenation’s energy demand. DRI said it will acquire all shares ofPittsburgh-based CNG to become the nation’s fourth largest powerand gas company. And, on Jan. 20, Dominion Energy announced theacquisition of San Juan Partners, holder of working interests inthe San Juan Basin of New Mexico, the majority interest in a coalseam gas royalty trust, and other oil and gas interests.
The addition of Remington to Dominion Energy’s portfolio willrepresent the company’s second expansion into the Western CanadianSedimentary Basin. Last year, Dominion Energy acquired 100% ofArcher Resources Ltd., which now operates under the name DominionEnergy Canada Ltd. Dominion Energy said it intends to retain themajority of Remington employees.
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