UtiliCorp United filed information with the SEC related to its previously announced exchange offer for all of the outstanding publicly held Class A common shares of its 80%-owned subsidiary, Aquila, Inc. Aquila shareholders are being offered 0.6896 shares of UtiliCorp common stock in a tax-free exchange for each outstanding share of Aquila Class A common stock. “We strongly believe that greater shareholder value can be obtained by recombining the financial strength of UtiliCorp with Aquila’s growth strategy,” said UtiliCorp CEO Richard C. Green, Jr. “With its larger asset base, earnings potential and cash flow, the combined company will have more efficient access to capital to take advantage of opportunities we expect to materialize over the next 18 months.” The recent changes in the merchant energy sector, the general economy and the impact of these changes on the capital markets were significant factors in the decision to recombine the two companies, he added. The UtiliCorp exchange offer requires that at least a majority of Aquila’s Class A shares are tendered by Aquila stockholders other than UtiliCorp’s directors and executive officers, and this condition may not be waived. After successful completion of the exchange offer, UtiliCorp has committed to complete a “short-form” merger of Aquila with a UtiliCorp subsidiary. Following the completion of the short form merger UtiliCorp will adopt “Aquila” as its corporate name. Aquila is one of the largest wholesalers of electricity and natural gas in North America. UtiliCorp has total assets of about $11.9 billion and 12-month sales of $42.3 billion.

The Houston Exploration Co. grew its South Texas reserve base by 60% with the purchase of onshore producing properties from Conoco Inc. for $69 million in cash. The properties total 28,000 gross acres located in Webb and Zapata counties, South Texas, and include interests in 159 wells. The wells are producing from the Upper and Middle Wilcox and Lobo trends in the Alexander, Haynes, Hubbard and South Trevino fields of south Texas. During the first six months of 2001, the properties generated average net sales of 24.2 MMcfe/d. Houston Exploration CEO William G. Hargett said, the new properties are adjacent to the company’s production and operations in the Charco Field and will require virtually no additional personnel. The company also recently acquired 1,200 square miles of 3-D geophysical data to support its future drilling program in the area. Houston Exploration purchased its interests in the Charco Field of South Texas in 1996 with original production rates averaging 38 MMcfe/d. Since then the company has completed 115 successful wells and increased production to a current average rate of 105 MMcfe/d.

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