With today's announcement, Dominion now has sold or agreed to sell all of the E&P operations that it plans to divest. The company is retaining its Appalachian E&P operations and approximately 1 trillion cubic feet equivalent (Tcfe) of reserves -- primarily natural gas -- because of their strategic fit with the rest of the company.
Sale of the Mid-Continent operations, which are primarily in Oklahoma, is expected to close by the end of the third quarter 2007, subject to customary closing conditions and adjustments. All other previously announced E&P sales have closed or are scheduled to close by that time.
"Today's announcement is the final transaction needed to complete our transition into a company more focused on energy infrastructure businesses," said Chairman, President and CEO Thomas F. Farrell II. "We excel in those businesses and believe that Dominion has the right mix of high-quality assets, growth opportunities and people to prosper in today's environment and serve our customers and shareholders well."
Dominion announced last November that it would pursue the sale of most of its E&P assets as part of a strategic repositioning. The move is designed to enhance the long-term value of the company by realigning Dominion's operations and risk profile more closely with the company's peer investment group of utilities. Dominion will focus on power generation and electricity and natural gas distribution, transmission, storage and retail businesses.
Farrell noted the factors favoring the company include the strength and diversity of the Virginia economy, the stability and incentives provided by the new Virginia hybrid regulatory model, superior growth opportunities in Dominion's pipeline and storage business, and improving conditions in markets served by its merchant power fleet.
"There is no other company in our industry that can match our assets, people and opportunities," Farrell said.
Dominion is being advised in the sale by the investment banking firms of JPMorgan, Lehman Brothers and Juniper Advisory LP. BakerBotts LLP and McGuireWoods LLP are the company's legal advisers for the sale.
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