El Paso Corp. Monday reported “significant” progress in selling several noncore assets, with agreements completed or nearly finalized that altogether should net the company close to $275 million.
Subsidiary El Paso Exploration & Production Co. agreed to sell two natural gas producing properties to undisclosed buyers for a total of $77 million. One property being sold is located in the San Juan Basin in northwestern New Mexico; it was acquired by El Paso in 2007 when it purchased Peoples Energy (see Daily GPI, Aug. 20, 2007). Properties in the Shongaloo and Spring Hill fields, which are located along the Louisiana/Arkansas border, also are being sold to undisclosed buyers.
The properties to be sold contain total proved reserves estimated at 40 Bcfe, with current production of 15 MMcf/d. The sales, with an effective date of Dec. 1, are scheduled to be completed by the end of January.
El Paso also executed an agreement to sell its stake in the Porto Velho power generation facility in Brazil for $178 million. The sale, which should close by the end of March, would complete the company’s exit from the power business in Brazil. Sales proceeds are expected to be paid with up to $100 million in cash, with the balance paid by a note from the unnamed buyer.
In addition, the Houston-based operator received $20 million from the completed sale of its legacy fuel oil terminal in South Boston, MA.
In early November El Paso reported it would meet its debt maturities and other ongoing obligations in 2009, but at that time it reduced its spending plans for the coming year by around $3 billion (see Daily GPI, Nov. 7). Through mid-2009 El Paso had said it would sell around $150 million worth of noncore assets and would consider taking on partners “on one or more pipeline expansion projects.”
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