After a positive surprise with its fourth quarter earningsperformance, Phillips Petroleum continued to astonish observerslast week, buying Tosco Corp. in a $7 billion stock transactionthat will make Phillips the second-largest refining company in theUnited States with a capacity of 1.7 MMbbl/d.
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Articles from Sales
Phillips Builds Refining, Sales with $7B Tosco Deal
After a positive surprise with its fourth quarter earningsperformance, Phillips Petroleum continued to astonish observersover the weekend, buying Tosco Corp. in a $7 billion stocktransaction that will make Phillips the second-largest refiningcompany in the United States with a capacity of 1.7 MMbbl/d.
Industry Brief
Asset sales within the energy industry continue to be the nameof the game as the winter heating season begins to set in. Two ofQuestar Corp.’s subsidiaries are the latest participants, as theyhave entered into agreements to sell working interests in oil andgas producing properties in Oklahoma and northern Texas as well asan Oklahoma gas-gathering system. Chesapeake Energy Corp. hasagreed to acquire the assets from Questar Exploration andProduction and Questar Gas Management for $27 million dollars. Thesale includes working interests in 290 properties with a currentcombined net production of about 4.3 MMcf/d and 180 b/d. Theagreement was effective on the first of this month, and thecompanies hope to close the deal by Dec. 31, 2000. The producingproperties do not have long-term strategic importance to Questar,said Gary Nordloh, president of Questar Exploration and Production.The asset sale will help improve operating efficiency and result inan immediate decrease in Questar’s amortization rate, he added.
Shell Forms Sales Pact with Essential.com
Shell Energy will be selling gas to Georgia retail customersthrough Essential.com, according to a partnership the two companiesannounced yesterday. Essential.com already provides a one-stop shopfor a broad range of energy and communications services.
Arctic Gas Becomes a Necessity
Alberta spot sales have reached C$7/Mcf (US$4.83) and centralCanadian distributors are warning customers to expect an expensivewinter. Analysts see no end to the tight markets. But natural-gasproducers say they have found a way out — tap the Arctic.
Arctic Gas Becomes a Necessity
Alberta spot sales have reached C$7/Mcf (US$4.83) and centralCanadian distributors are warning customers to expect an expensivewinter. Analysts see no end to the tight markets. But natural-gasproducers say they have found a way out — tap the Arctic.
TCPL Asset Sales Reach $3 Billion
TransCanada Pipelines continued its asset divestiture program last week with the sale of its 50% interest of the Express System crude oil pipeline to AEC and its 10% interest in the Chilean natural gas distributor Metrogas through a $70 million agreement with the existing Metrogas shareholders.
TCPL Asset Sales at $3 Billion; Not Done Yet
After putting its 50% interest of the Express System crude oil pipeline on the market last December as part of CEO Doug Baldwin’s $3 billion divestiture program, TransCanada PipeLines Ltd. (TCPL) finally found a buyer in Alberta Energy Company Ltd. (AEC) for a net total of $60 million. Included in the sale is TransCanada’s 50% interest in Marquest marketing entities which act as shippers on the system.
Industry Briefs
El Paso Merchant Energy and PSE&G announced therestructuring of a long-term power sales agreement between theutility and the Newark Bay generating project. The New Jersey Boardof Public Utilities (BPU) has approved the agreement. The NewarkBay project is a 135 Mw gas-fired cogeneration facility managed byEl Paso and located in Newark. PSE&G is required by law to buythe plants power and has been under a long-term agreement at pricesthat are now often above market. Under the new agreement, El Pasowill supply a fixed amount of electricity to PSE&G at reducedrates. PSE&G expects that the new agreement will save itscustomers $75 million over the remaining 13-year term of theagreement. El Paso Merchant Energy will be able to minimize thecosts associated with servicing the agreement, and obtain greaterflexibility in supplying energy to PSE&G under the contract, bypotentially delivering power from alternative sources.
Utilicorp Unloads Retail Sales Unit to EPCOR
UtiliCorp United announced that a Canadian subsidiary is sellingoff its retail electricity business in Alberta for US$75 million toEPCOR, an Alberta power, water and natural gas company based inEdmonton. Utilicorp will retain the wires portion of its Albertaelectricity holdings, which include about 54,000 miles oflow-voltage distribution lines. It entered the Alberta retail powermarket only seven months ago with the purchase of TransAlta Corp.’sprovincial assets for $450 million.