WPS Resources Corp. completed the $315 million acquisition of natural gas distribution operations serving 161,000 customers in Michigan from Aquila Inc. Annual gas throughput from the Michigan operations totals 36 Bcf/year, and the distribution system includes a 3.6 Bcf storage field. The assets operate under a cost-of-service environment and are currently allowed an 11.4% authorized return on equity on a 45% equity component of the regulatory capital structure. “This acquisition is a great strategic fit with our existing operations given the geographic and operational profile of our combined asset base,” said WPS Chairman said Larry Weyers. “We are building the scale and scope of our regulated operations in a jurisdiction where we already operate. Natural gas distribution is a core business for us.” Weyers said that WPS Resources will not reduce field staff, but instead is welcoming the 182 Michigan employees into its existing ranks of 2,945 employees. The assets will be owned and operated by WPS Resources’ wholly owned subsidiary, Michigan Gas Utilities Corp. The Minnesota portion of the acquisition announced in September 2005 is expected to close in the first half of 2006. Combined with the acquired Michigan assets, WPS will serve roughly 469,000 gas customers through its regulated utilities with annual natural gas throughput of 118.6 Bcf. WPS already serves more than 476,000 electric customers through its regulated electric utilities.
Australia-based Macquarie Bank Group said that effective March 31 it renamed Cook Inlet Energy Supply LLC as Macquarie Cook Energy LLC, reflecting its purchase of the company last fall (see Daily GPI, Oct. 21). “As Macquarie Cook Energy, we will continue to serve customers under a new name which combines the natural gas market expertise of Cook Inlet with the financial trading expertise and resources of the Macquarie Bank Group,” said Nick O’Kane, chairman of Macquarie Cook Energy. “The decision to change our name reflects the successful integration of the Cook Inlet platform into the Macquarie Bank Group, building upon Cook Inlet’s expertise that has served the North American gas market over many years. We recognize the brand value that Cook’s reputation has in our industry and its importance as a key strength of our business. Adding the Macquarie name to that foundation underpins the increased services and worldwide network that our company now provides to the industry.” The terms and conditions of existing agreements between counterparties and Cook Inlet will remain unchanged under Macquarie Cook Energy, the company said. More information on the company can be found at https://www.macquariecookenergy.com.
CenterPoint Energy Inc. said it successfully closed on three new bank credit facilities totaling $2.05 billion on Friday for the parent company and its wholly-owned subsidiaries, CenterPoint Energy Houston Electric LLC (CEHE) and CenterPoint Energy Resources Corp. (CERC). “We believe the terms of these new facilities not only reflect the significant improvement we have achieved in our credit metrics over the last several years, but also the excellent relationships we have with our banks,” said CFO Gary L. Whitlock. The first credit facility at CenterPoint Energy is a five-year, $1.2 billion senior unsecured revolving credit facility that replaced a $1 billion, five-year facility established in March 2005. The new credit facility has a first drawn cost of LIBOR plus 60 basis points at existing credit ratings, versus LIBOR plus 87.5 basis points for the facility it replaced. The second facility at CEHE, the company’s electric transmission and distribution subsidiary, is a five-year, $300 million senior unsecured revolving credit facility that replaced a $200 million, five-year facility established in March 2005. The third facility at CERC, the company’s natural gas distribution, pipelines and field services subsidiary, is a five-year, $550 million senior unsecured revolving credit facility that replaced a $400 million, five-year facility established in June 2005. The proceeds from these facilities will be used for general corporate purposes.
Toronto-based EnerNorth Industries Inc. said Monday that it has increased its natural gas reserves position through the US$1.99 million (C$2.3 million) acquisition of privately-held Alberta Corp. from two companies. Alberta Corp. has oil and natural gas production assets in the Canadian provinces of Saskatchewan and Alberta. EnerNorth said the purchase price has been satisfied by a cash payment of C$2.1 million and the delivery of 103,212 common shares of EnerNorth issued at a price of C$2.18 per share. Alberta Corp. is now a wholly owned subsidiary of EnerNorth. Alberta Corp.’s current production averages 50 boe/d and is predominantly natural gas. The company’s assets include an interest in a natural gas unit located at Brock, SK, an interest in the Cactus Lake area of Saskatchewan and an interest in the Coutts area of Alberta. EnerNorth said it believes there is upside potential from various identified drilling locations on 24,960 gross acres (2,520 net acres) of lands in these areas. For the six month period ending Dec. 31, 2005, EnerNorth produced an average of 211 Mcf/d, which marked a 34% decrease from the company’s 320 Mcf/d for the same period during 2004.
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