Duke Energy Field Services, Denver, postponed plans for an initial public offering of common stock Thursday, citing volatile market conditions.
The wholly owned subsidiary of Duke Energy Corp., Charlotte, NC, and Phillips Petroleum Co., Bartlesville, Okla., said shares of DEFS, one of the nation's largest natural gas gatherers and one of the largest producers and marketers of NGL, will be offered to the public when market conditions improve. In the meantime, DEFS will continue to be owned 69.7% by Duke and 30.3% by Phillips.
Duke and Phillips reached a definitive agreement to merge Duke's gas gathering and processing business�DEFS�with Phillips's gas processing and marketing unit, GPM, in January. The resulting midstream company retained the Duke Energy Field Services name. The new company, with an enterprise value of $5-6 billion, planned to offer about 20% of its equity to the public.
At the time the company was formed, officials said existing NGL arrangements between Phillips Petroleum and its gas processing and marketing unit would be maintained by the new company for 15 years. DEFS operates in 11 states, owns and operates 70 plants and 57,000 miles of pipelines, and has an estimated 17 tcf of contracted gas supply. Plans called for processing about 5 bcfd of raw gas and producing 400,000 b/d of NGL.
Duke and Phillips expected the new firm to realize synergies, primarily from operating efficiencies. James W. Mogg, president of Duke Energy's gathering and processing business, was named chairman, president, and CEO of DEFS, and Michael J. Panatier, president and CEO of Phillips GPM, was named vice-chairman.