NiSource Inc. on Friday completed the sale of its exploration and production subsidiary, Columbia Energy Resources (CER), to Triana Acquisition LLC, an affiliate of Morgan Stanley Capital Partners. The sale primarily consists of Columbia Natural Resources (CNR) and its 1.1 Tcf of natural gas reserves.

Triana, headquartered in Charleston, WV, agreed in July to purchase all of the stock of CER for $330 million in cash (see Daily GPI, July 7). Triana also agreed to deliver the approximately 94 Bcf remaining under forward sales contracts through 2006.

Triana’s CEO W. Henry Harmon was formerly president of CNR, and Richard W. Beardsley, Triana vice president, Geo-Sciences and Shawn E. Casey, Triana vice president, Land, were formerly CNR vice presidents. The newly created firm says the team “is largely responsible for the re-definition of the Appalachian Basin,” which the company believes holds the promise of substantial new oil and gas production.

NiSource, headquartered in Merrillville, IN, will apply the $220 million in after-tax cash proceeds from the sale to debt reduction.

“The sale of the E&P business is consistent with NiSource’s strategy to focus on our regulated utility and pipeline assets, which make up virtually all of our operating income,” said Gary L. Neale, NiSource CEO. Completing the sale effectively ends NiSource’s involvement in non-regulated businesses, Neale said.

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