Making good on its previously announced intentions of getting out of the retail energy marketing business, Bedminster, NJ-based NUI Corp. said last week that it has sold substantially all the customer accounts of its retail energy marketing affiliate, NUI Energy, Inc., to Houston Energy Services Co., LLC (HESCO).

The company reported that the sale of the NUI Energy customer accounts, combined with the liquidation of the underlying gas supply contracts, generated a pre-tax gain of $1.2 million. As a result, NUI anticipates that NUI Energy’s results from operations for the six months ended Sept. 30 will be marginally profitable as anticipated profits in NUI Energy’s third quarter are expected to be partially offset by expenses related to receivable collection activities during the fourth quarter. An NUI spokesman said that full terms of the transaction are not being disclosed.

“We indicated when we reported second quarter results that the volatility of NUI Energy’s contribution to corporate results does not fit with our plan to reduce business risk and provide investors with more predictable earnings,” said John Kean, Jr., CEO of NUI. “We have made progress on this plan, but still have more to do. Continuing the sale of non-strategic assets, ensuring that our balance sheet remains strong, and improving the financial performance of our remaining operations are key objectives for this year.”

During the original announcement in late April (see NGI, May 5), Kean said NUI’s exit from the business was consistent with the company’s commitment to shed under-performing businesses.

The sale to HESCO includes more than 3,000 customer accounts in New Jersey, Florida and North Carolina with annual sales in excess of $160 million. Through the terms of the agreement, NUI Energy has agreed to continue to serve the accounts through the end of June to allow for a smooth transfer. NUI Energy said it is currently in negotiations to sell the 50 remaining accounts in Pennsylvania and expects to close on this sale shortly.

Kean said that the decision to sell to HESCO was based on more than just financial considerations. “We value the relationships we’ve developed with our customers and wanted to ensure that they would be in good hands after we exited the retail energy marketing business,” he said. Kean added that HESCO already serves customers in both New Jersey and Florida, as well as 10 other states.

HESCO President Thomas Goudie said the acquisition of NUI Energy’s customer accounts represented a strategic advantage to his firm. “These 3,000-plus accounts strengthen our competitive position in both New Jersey and Florida, while giving us an entree into the North Carolina market,” he said.

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