Summary
Dominion Resources, Inc. (now Dominion Energy, Inc.) announced on July 5, 2007, a significant divestiture of its Mid-Continent exploration and production (E&P) operations. The company entered into an agreement to sell these assets to Linn Energy, LLC for approximately $2.05 billion, with the transaction anticipated to close in the third quarter of 2007. These operations encompass substantial proved natural gas and oil reserves, totaling approximately 780 billion cubic feet equivalent as of December 31, 2006. This sale is part of a larger strategic initiative by Dominion to exit the exploration and production business. The company has either completed or agreed to sell all of its planned E&P divestitures, including significant transactions in offshore, Canadian, Alabama, Michigan, Permian, Gulf Coast, Rockies, South Louisiana, and San Juan basins. The proceeds from these sales are earmarked for debt reduction, aiming to reduce outstanding debt by $3.2 to $3.5 billion, with remaining net proceeds intended for share repurchases.
Key Highlights
- 1Dominion Resources, Inc. entered into a definitive agreement to sell its Mid-Continent E&P operations to Linn Energy, LLC for approximately $2.05 billion.
- 2The sale includes approximately 780 Bcfe of proved natural gas and oil reserves as of December 31, 2006.
- 3The transaction is expected to close in the third quarter of 2007, subject to customary closing conditions.
- 4This divestiture is the final piece of Dominion's broader strategy to exit its E&P business.
- 5Proceeds from the E&P asset sales are intended to reduce outstanding debt by $3.2 to $3.5 billion.
- 6Remaining net proceeds from the dispositions will be used for share repurchases.