MERGERS - ACQUISITIONS / NW Natural, NIPSCO Combine Subsidiaries Into One Canadian Oil and Gas Firm
PORTLAND, Ore.--(BUSINESS WIRE)--April 15, 1998--Northwest Natural Gas Co. (Nasdaq Stock Market:NWNG),dba NW Natural, and NI Energy Services, Inc. (NESI), have combined their Canadian oil and gas exploration and production subsidiaries into one company, Canor Energy Ltd., to ramp up growth prospects and increase competitiveness.
NW Natural combined its Canor Energy Ltd. with NESI's Southlake Energy effective March 31, 1998, creating a new Canor.The new company is a fully integrated Canadian oil and gas development, exploration and production company.
The amalgamation of the subsidiaries was achieved through the purchase of Southlake's stock in exchange for shares in Canor. The new Canor is 66 percent owned by NW Natural and 34 percent owned by NESI.
''The merger gives Canor the scale and assets it needs to compete aggressively and grow rapidly in Canada,'' said Canor's chief executive officer, Rick Harper. Harper also is vice president, energy marketing and supply, of NW Natural.
''The new Canor is starting as a 100 percent equity company with the ability to finance in Canadian capital markets up to a debt to capitalization ratio of about 50 percent,'' said Harper. ''The strong balance sheet of the new company, coupled with good internal cash flow and potential increased equity from existing owners, will enable us to continue to grow rapidly.''
Canor had managed NESI's Southlake assets since 1995 under a previous agreement. As a result, the merger has secured the organizational size and strength of the existing Canor group.
The combined company has a production volume approaching 4,000 barrels of oil equivalent per day. Natural gas equivalent reserves total more than 120 billion cubic feet.
Canor has achieved double-digit growth in reserves for the past several years through demonstrated technical capabilities in finding and developing oil and gas prospects.
''For NW Natural this is a growth play, with the principal objective being the rapid growth of energy assets,'' said NW Natural's President and Chief Executive Officer Richard G. Reiten. ''Canor already has demonstrated its ability to develop proven reserves and generate net income.''
''Since NESI formed Southlake Energy, Inc. in December 1995, via a C$17 million oil and gas property acquisition, it has been profitable each year and has doubled in size under Canor's able management,'' said Jeff Yundt, executive vice president and chief operating officer, Energy Services of NIPSCO Industries, Inc. ''I feel confident that Rick Harper and Russ Zaharko, president and chief operating officer of Canor, will successfully meet the rapid value growth expectations of both owners.''
NW Natural, based in Portland, Oregon, is a natural gas local distribution company serving about 460,000 customers in Oregon and southwest Washington. Information about NW Natural is available via the Internet at www.nwnatural.com.
Canor's board of directors will include four directors designated by NW Natural and two designated by NESI.
Merrillville, Indiana-based NESI is a subsidiary of NIPSCO Industries, Inc. (NYSE:NI - news), formed in 1985 to maximize unregulated market opportunities. Independently and with partners, NESI develops and invests in natural gas assets and other energy related enterprises in the United States and Canada. Information about NIPSCO Industries, Inc. and its subsidiaries is available via the Internet at www.nipsco.com. |
