Progress Energy announced today that a subsidiary has entered into three independent transactions to acquire approximately 162 producing natural gas wells with proven reserves of 195 Bcf for $148 million.

The agreements are with Republic Energy, Inc. and two other privately owned Texas companies. The property on which the Republic Energy wells are located is north of Fort Worth, TX in the Barnett Shale. The other properties, which represent a smaller portion of the reserves acquired, are located in East Texas, adjacent to gas fields currently owned by the company through its Westchester Gas Co. subsidiary.

The transactions by subsidiary Progress Fuels Corp. are expected to close by the end of the month and will be accretive to Progress Energy’s earnings in 2003. A limited partnership has been created to manage the north Texas assets and the company will be a subsidiary of Progress Fuels. The East Texas assets will be added to the Westchester production company.

Raleigh, NC-based Progress Fuels owns and operates Progress Energy’s fuel extraction, manufacturing and delivery operations. This includes coal mining, synthetic fuel operations and fuel transloading facilities at several sites in Virginia, West Virginia and Kentucky. Progress Fuels also manages the company’s natural gas assets in Colorado, Texas and Louisiana and ash-management operations in Florida.

“While the competitive wholesale electric markets are down, we still see many opportunities for growth in our fuels business, particularly in natural gas,” said Bonnie V. Hancock, president of Progress Fuels. “These acquisitions are a great opportunity to add to what is already a high-quality, low-risk set of gas producing assets that have an excellent strategic fit with Progress Ventures’ competitive generation assets.”

Through its subsidiaries Mesa Hydrocarbons Inc. in Denver and Westchester Gas in Jonesville, TX, Progress Fuels has net annual gas production of approximately 20 Bcf. The new acquisitions will add approximately 11 Bcf to the annual total. Westchester and Mesa have 155 and 107 Bcf in net reserves respectively.

Progress Energy is the parent of Carolina Power & Light Co., Florida Power Corp. and Carolina Natural Gas Corp.

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