Dominion (NYSE: D) and Equitable Resources, Inc. (NYSE: EQT) announced
today that they have terminated their agreement for the purchase of the
Dominion Peoples and Dominion Hope natural gas distribution companies by
Equitable.
"Given the continued delay in achieving the final regulatory approvals
for this transaction, we believe it is best to terminate our agreement,"
Thomas F. Farrell II, Dominion chairman, president and chief executive
officer, and Murry S. Gerber, Equitable chairman and chief executive
officer, said in a joint statement. "While we remain convinced that
customers would have benefited from the transaction and are disappointed
that it could not be completed in a timely manner, we recognize that it
is time to move forward."
Dominion also announced that it plans to seek other offers for the
purchase of the utilities.
"These are high-quality assets," Farrell said. "Dominion has received a
number of unsolicited inquiries in recent months from others expressing
an interest in acquiring Dominion Peoples and Dominion Hope. We now will
contact those companies as well as other potential buyers. In light of
the regulatory groundwork done since the agreement with Equitable was
announced, we anticipate moving quickly to seek the required approvals
once a new buyer has been identified."
In making its decision, Equitable cited the need to focus on significant
organic growth opportunities in other parts of its business.
"We have decided to focus our growth efforts on exciting strategic
opportunities for expanded horizontal drilling and infrastructure
development in the Appalachian Basin," Gerber said. "That growth will
add jobs and contribute substantially to the economic revitalization of
western Pennsylvania and the other communities in which we invest."
Dominion and Equitable in March 2006 announced a sales agreement for
about $970 million plus adjustments to reflect capital expenditures and
changes in working capital. The Pennsylvania Public Utility Commission
approved the sale of Dominion Peoples in April 2007. Approval of the
Dominion Hope sale is still pending before the West Virginia Public
Service Commission. The Federal Trade Commission (FTC) opposed the sale
in Pennsylvania. On May 14, 2007, a federal judge ruled against the
FTC's request for an injunction to prevent the Dominion Peoples sale.
The FTC appealed this ruling to the U.S. Third Circuit Court of Appeals.
On June 1, 2007, the Third Circuit granted the FTC's request to enjoin
the sale pending the court's decision. The FTC's appeal remains pending
before the Third Circuit.
Dominion Peoples serves about 359,000 homes and businesses in
Pennsylvania from its headquarters in Pittsburgh, and Dominion Hope
serves about 115,000 homes and businesses in West Virginia from its
headquarters in Clarksburg, W.Va. Together, they serve less than 12
percent of Dominion's 4 million electric and natural gas local
distribution customer accounts in the Mid- Atlantic and Midwest.
Goldman, Sachs & Co. will remain as Dominion's financial adviser in any
transaction and McGuireWoods LLP will provide legal services.
Dominion is one of the nation's largest producers and transporters of
energy, with a portfolio of approximately 26,500 megawatts of
generation, 7,800 miles of natural gas transmission pipeline and 1
trillion cubic feet equivalent (Tcfe) of proved natural gas and oil
reserves. Dominion also owns and operates the nation's largest
underground natural gas storage system with about 960 billion cubic feet
of storage capacity and serves retail energy customers in 11 states. For
more information about Dominion, visit the company's Web site at http://www.dom.com.
Equitable Resources is an integrated energy company with emphasis on
Appalachian area natural gas supply, gathering, processing, transmission
and distribution. For information, please visit Equitable's website, http://www.eqt.com.
Cautionary Statement
Disclosures in this press release contain forward-looking statements.
Statements that do not relate strictly to historical or current facts
are forward-looking. Without limiting the generality of the forgoing,
forward- looking statements contained in this press release specifically
include Equitable's organic growth opportunities. A variety of factors
could cause Equitable's actual results to differ materially from the
anticipated results. The risks and uncertainties that may affect the
results of Equitable's forward-looking statements include, but are not
limited to, those set forth under Item 1A, "Risk Factors," of
Equitable's Form 10-K for the year ended December 31, 2006.
Any forward-looking statement speaks only as of the date on which such
statement is made and Equitable does not intend to correct or update any
forward-looking statement, whether as a result of new information,
future events or otherwise.
