Shareholders for both El Paso Energy and Sonat Inc. announcedoverwhelming approval of the two companies’ proposed mergerThursday. For Sonat, representatives for 86% of the company’soutstanding shares voted in a special shareholders’ meeting, andthe merger was approved by 98%. El Paso Energy’s stockholders alsoapproved the merger at a meeting held Thursday. Out of 93 millionEl Paso shares that voted, 95% voted in favor of the merger. Underthe terms of the $6 billion agreement, which was announced in March(see Daily GPI, March 16), Sonat stockholders will receive oneshare of El Paso Energy common stock for each share of Sonat commonstock exchanged in the merger. El Paso will issue 110 millioncommon shares to complete the transaction after the deal closes.Sonat said it expects the regulatory reviews of the proposed mergerto be completed during the third or fourth quarter of this year.

As expected, the European Commission has launched an in-depthprobe into the proposed merger between Exxon and Mobil, citingconcerns about reduced competition. The commission said it willmake a detailed assessment of the impact of the transaction onexploration, development and production of crude oil and naturalgas, gas distribution in the Netherlands and in Germany, thelubricants supply chain, aviation lubricants, new technologyconverting natural gas into fuels, and the refining and marketingof motor fuels in a number of European countries. A final decisionby the commission is expected by mid-October. According to themerger, Exxon shareholders will own 70% of the combined Exxon Mobilentity, while Mobil shareholders will own 30%.

Magnum Hunter Resources closed the previously announcedacquisition of oil and gas reserves and related assets from VastarResources. The acquisition included Vastar’s interest in 476 wells,a gas processing plant and two gas gathering systems located in thestates of Texas, Oklahoma and Arkansas. The total purchase pricewas $32.5 million, after purchase price adjustments, including anApril 1 effective date. The reserves and related assets are locatedin the Walnut Bend Field in North Central Texas, the Madill Fieldin Southern Oklahoma, and the Walker Creek Field in SouthwesternArkansas. The Company’s working interests in the three fields rangefrom 56-100%. The three fields generate net sales of 1,000 b/d ofliquids and 10 MMcf/d of gas.

The California Public Utilities Commission voted Thursday to cutPacific Gas & Electric Co.’s regulated rate of return for 1999to 10.6% from its 1998 rate of 11.2%. The agency also decided atThursday’s meeting to leave Southern California Edison Co.’s 1999rate of return unchanged at 11.6 percent and to lower San Diego Gas& Electric Co.’s return to 10.6%. The new rates will beretroactive to Jan. 1. PG&E had asked to raise its ROE for 1999to 12.1%, while an administrative law judge had called for allthree to have RORs set at 10.6%.

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