IN THE NEWS / Union Pacific Resources group Sells Domestic Gas Business
FORT WORTH, Texas (AP) -- Union (NYSE:UPR) Pacific Resources Group is
selling its domestic natural gas gathering, processing, pipeline and marketing operations for $1.35 billion to Denver-based Duke (NYSE:DUK - news) Energy Field Services.
The sale involves most of the assets of the UPR subsidiary Union Pacific Fuels, said UPR spokesman Tom Blank Sunday, though crude marketing is not included.
The transaction includes five-year contracts under which Duke Energy will market UPR's U.S. natural gas and gas liquids production. The sale is expected to close early next year.
''The sale ... will be of great benefit to both UPR and Duke Energy,'' UPR chairman and CEO Jack Messman said. ''It allows UPR to reduce debt and to concentrate on highly desirable exploration and development opportunities in the U.S., Canada and Latin America, and it brings a fine combination of gathering, processing, pipeline and marketing operations to Duke Energy.''
UPR needed the cash from the Duke deal after paying more than $2.6 billion for Norcen Energy Resources Ltd. earlier this year in an effort to expand production internationally. UPR is one of the biggest independent oil and gas exploration and production companies in the United States, while Norcen's properties are located in four major areas including Canada and Latin America.
''We knew we would have to sell a substantial amount of assets to better manage the debt,'' Blank said.
Duke Energy Field Services is gaining assets where it has none and strengthening its holdings in other areas, said John Barnett, a spokesman for the company's parent, Duke Energy of Charlotte, N.C.
''We feel that we're getting them at a good price,'' Barnett added.
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