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Gas News Release
August 9, 1999
Dominion Resouces, Consolidated Natural Gas Agree to Sell
Virginia Natural Gas as Condition of Merger Approval
RICHMOND, VA., and PITTSBURGH - Dominion Resources Inc.
(NYSE: D) and Consolidated Natural Gas Company (NYSE: CNG) said today they have
agreed to sell CNG's Virginia Natural Gas, Inc. (VNG) local gas distribution subsidiary
under an agreement with the staff of the Virginia State Corporation Commission
(SCC). In exchange, the SCC staff supports the proposed merger of Dominion Resources
and CNG.
Under terms of the agreement, Dominion Resources will have
one year after the merger is completed to sell VNG to a third party. If the
sale is not completed by then, VNG is to be spun off as an independent company
with the common stock being distributed to Dominion Resources shareholders.
Both deadlines are subject to reasonable extensions, which may be granted by
the SCC.
The commission is not bound by the agreement but will consider
it during its deliberations.
Thos. E. Capps, chairman, president and chief executive officer
of Dominion Resources, and George A. Davidson, Jr., chairman and chief executive
officer of CNG, said in a joint statement: "Today's stipulation with the
SCC staff is yet another step forward in the merger process and builds on our
earlier approvals from the Pennsylvania and West Virginia commissions. We anticipate
having all approvals to complete the merger by year end.
"When the merger is completed, we can direct our full
energies toward the creation of additional shareholder value at America's premier
energy company."
Shareholders have already overwhelmingly approved the combination,
and the Pennsylvania and West Virginia public utility commissions unanimously
approved it. In addition to Virginia and North Carolina, approvals are also
required from several federal agencies.
Capps and Davidson said the divestiture will not interfere
with the plans to create one of the largest integrated energy companies in the
United States. The combined company will have nearly 4 million natural gas and
electric utility customers in five states, about 20,000 megawatts of electric
generating capacity, and more than 3 trillion cubic feet equivalent of natural
gas and oil reserves.
VNG, with about 223,000 customers in the Hampton Roads region
of Virginia, is the only place where the Dominion Resources and CNG utility
service areas overlap. In 1998 VNG had after-tax earnings of $12.5 million,
or about 1.5 percent of income from combined continuing operations for Dominion
Resources and CNG.
Capps and Davidson noted that Virginia Natural Gas customers
will see no change in service during the interim period: "We are committed
to ensuring that there is a smooth transition for VNG's customers and employees.
VNG is a superior company operated by an exceptional group of people."
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This press release contains forward-looking statements. The
companies wish to caution readers that the assumptions which form the basis
for forward-looking statements with respect to or that may impact earnings for
fiscal 1999, and thereafter, include many factors that are beyond the companies'
ability to control or estimate precisely, such as estimates of future market
conditions and the behavior of other market participants. Other factors include,
but are not limited to, weather conditions, economic conditions in the companies'
service territories, fluctuations in energy-related commodity prices, conversion
activity, other marketing efforts and other uncertainties.
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For further information contact:
Dan Donovan
412-690-1370
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