Range Resources and FirstEnergy announced last week the officialbeginning to their $200 million Appalachian joint venture, GreatLakes Energy Partners. The equal partnership combines all of bothcompanies’ oil and gas assets in the region.

Plans for the partnership were first announced last June (see DailyGPI, June 25). Each company has made netcontributions of $100 million in the new venture. Great Lakes hasproved reserves of 450 Bcf of equivalent natural gas and oil – about90% of it gas – and 4,700 miles of pipelines, as well as drillingrights to 980,000 acres in the Appalachian Basin. With over 1,000proved drilling locations within existing fields and a reserve life of18 years, Great Lakes expects to increase production by activedevelopment of existing fields and exploitation of deeperformations. In addition, the partners said Great Lakes intends topursue acquisition opportunities within its core area of operations.

John Pinkerton, CEO of Fort Worth, TX-based Range, said, “Thisunique transaction combines the assets and talents of thecontributing companies. With a long-life reserve base, strong cashflow and an experienced management team, Great Lakes is wellpositioned to pursue development and acquisition opportunities inthe Appalachian Basin. Great Lakes extensive gathering andtransportation systems, coupled with FirstEnergy’s bundled energyservice concept, are expected to provide the ability to fullyintegrate the natural gas chain from the wellhead all the way tothe end user.”

Because the company is newly formed, it has yet to define goals,said Steven Grose, Range’s senior vice president. “Our plan in thefirst 60 days of the company’s existence is to form a plan,” hesaid. Great Lakes will be led by a board of eight members, fourcoming from each company. Although no headquarters has been set upas of yet, Grose said Hartsville, OH, is a likely site.

“The move allows us to market our share of the energy producedat a low-cost, more efficient rate. Being a full service energyprovider, this opportunity was too good to pass up,” said MarkDurbin, a FirstEnergy spokesman. FirstEnergy, a holding company forutilities such as Ohio Edison, The Illuminating Co., PennsylvaniaPower, and Toledo Edison, as well as an energy-related products andservices company, said the venture will create its largestAppalachian asset.

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