Duke Energy Field Services (DEFS), a wholly owned subsidiary ofDuke Energy Corp. and Phillips Petroleum Co., announced thepostponement of an initial public offering of common shares onFriday because of “volatile market conditions.” The company saidshares will be offered to the public when stock market conditionsare more favorable. In the meantime, DEFS will continue to be owned69.7% by Duke Energy and 30.3% by Phillips.

DEFS is one of the nation’s largest natural gas gatherers, and oneof the largest producers and marketers of natural gas liquids. DukeEnergy and Phillips completed the combination of their midstreamassets into DEFS last month after agreeing with an order by theFederal Trade Commission to sell off nearly 3,000 miles of gasgathering lines in the Midcontinent region. Shortly thereafter, DEFSagreed to acquire gathering and processing assets in Oklahoma jointlyowned by Conoco and Mitchell Energy (see Daily GPI, Dec. 17, 1999 and Jan. 6, 2000). The transactions covermidstream assets totaling $6 billion.

The FTC consent order, which is subject to final agencyapproval, determined the two transactions would create competitiveconcerns in several counties in Kansas, Oklahoma and Texas. Duke isnow in the process of divesting a total of 2,787 miles of gatheringlines. The majority of the lines (2,250 miles) will be sold toDuke’s joint venture partners, with 800 miles in Oklahoma alreadysold to Western Gas Resources Inc., co-owner of Westana GatheringCo., and 1,450 miles of gathering in the Austin Chalk area of Texasto be divested to Mitchell Energy, which co-owns theFerguson-Burleson County Gas Gathering System. The remaining 537miles of gathering lines are to be sold to FTC-approved buyersunder the terms of the consent order.

©Copyright 2000 Intelligence Press Inc. All rights reserved. Thepreceding news report may not be republished or redistributed, inwhole or in part, in any form, without prior written consent ofIntelligence Press, Inc.