|
Dominion News Releases
February 24, 1999
Dominion Energy to Acquire Canadian E&P Company
RICHMOND, Va.— Dominion Energy Inc. announced today that
it will make a cash tender offer of about $34 million (C$50 million), or approximately
$1.27 (C$1.90) cents per share, to acquire Remington Energy Ltd. (TSE: REL),
a publicly traded natural gas exploration and production company headquartered
in Calgary, Alberta. Including assumed debt, the transaction has a total value
of approximately $261 million (C$390 million).
Dominion Energy, the competitive power and natural gas subsidiary
of Dominion Resources Inc. (NYSE:D), will have total North American reserves
of more than 1 trillion cubic feet equivalent upon completion of the offer.
Daily production will exceed 350 million cubic feet equivalent.
The acquisition, which will be immediately accretive to earnings,
is the third investment already this year by DRI or Dominion Energy to position
DRI and its subsidiaries as major providers of electric power and natural gas
in U.S. Midwest and Northeastern markets, home to 40 percent of the nation’s
demand for energy.
On February 22, DRI and Consolidated Natural Gas (NYSE: CNG)
of Pittsburgh announced that DRI is acquiring all CNG shares to combine and
become the nation’s fourth largest electric power and natural gas company. On
January 20, Dominion Energy announced the acquisition of San Juan Partners,
holder of working interests in the San Juan Basin of New Mexico, the majority
interest in a coal seam gas royalty trust and other oil and gas interests.
Under an agreement approved unanimously by both companies’
boards of directors, the Canadian natural gas subsidiary of Dominion Energy
will acquire all outstanding common shares of Remington. The offer is expected
to be mailed to Remington shareholders by March 8.Today’s offer is expected
to remain open for 21 days with expiration at the end of March. The offer is
conditioned upon acceptance by holders of at least 66 2/3 percent of outstanding
Remington common shares; the required regulatory approvals, including Investment
Canada and Competition Act approvals; and other customary commercial conditions,
including no material adverse changes.
Shareholders of Remington holding approximately 22 percent
of outstanding common shares have agreed to tender their shares.
Remington has agreed to pay Dominion Energy a break-up fee
of $8 million (C$12 million) in certain conditions and has agreed not to solicit
further offers.
When the offer is completed, the addition of Remington to
Dominion Energy’s portfolio will represent the company’s second expansion into
the Western Canadian Sedimentary Basin. Last year, Dominion Energy acquired
100 percent of Archer Resources Ltd., which now operates under the name Dominion
Energy Canada Ltd.
Thomas N. Chewning, president and chief executive officer
of Dominion Energy, said:
"When we combine this planned acquisition with our acquisition
last month of San Juan Partners, Dominion Energy increases its proved reserves
to more than 1 trillion cubic feet equivalent and boosts daily production by
50 percent. This represents an historic milestone in Dominion Energy’s effort
to grow its production and reserves."
Viewed as part of Dominion Resources’ planned combination
with Consolidated Natural Gas, our onshore reserve base will serve to balance
the offshore reserves developed by CNG under its highly successful program.
Our combined companies will own reserves with geographic and geological diversity."
G. E. Lake Jr., senior vice president-oil and gas operations
of Dominion Energy, said:
"Remington fits well with Dominion’s long-term growth
strategy. It’s a logical addition to our group of businesses. We are acquiring
significant future development potential and adding a second core area of operations
to our existing growth platform in Canada. It represents an important component
of the combined company now planned by DRI and CNG."
Wayne K. Foo, president and chief executive officer of Dominion
Energy Canada, said:
"With this opportunity, we’re broadening our long-term
position in the western Canada basin. Our move into northeast British Columbia,
one of North America’s major gas supply regions, provides a new cornerstone
for Dominion Energy’s geographically diverse E&P activities.
"Our acquisition of Remington provides a strong, well
focused asset base and a staff with considerable exploration, production and
operations capability in the area. With exposure to the new Alliance pipeline,
this transaction also strengthens our capability to serve Midwest and Northeastern
markets."
Dominion Energy intends to retain the majority of Remington
employees.
FirstEnergy Capital Corp., financial advisor to Remington,
has advised the Remington board of directors that Dominion Energy’s offer is
fair from a financial point of view to the company’s shareholders. CIBC World
Markets is financial adviser to Dominion Energy.
###
|
