Duke Energy Field Services selling assets in Gulf Coast and eastern Oklahoma

May 30, 2003
Duke Energy Field Services LLC (DEFS) plans to sell assets in Mississippi, Texas, Alabama, and Louisiana to Crosstex Energy Services LP, Dallas, and to sell eastern Oklahoma assets to ScissorTail Energy LLC, Stroud, Okla.

By OGJ editors

HOUSTON, May 30 -- Duke Energy Field Services LLC (DEFS) plans to sell assets in Mississippi, Texas, Alabama, and Louisiana to Crosstex Energy Services LP, Dallas, and to sell eastern Oklahoma assets to ScissorTail Energy LLC, Stroud, Okla.

"These sales are consistent with our strategy to rationalize and optimize our asset base," said Jim Mogg, DEFS chairman, president and CEO. The two deals together total more than $90 million. Both transactions are expected to close by June 30.

The sale to Crosstex is subject to regulatory approvals. DEFS will use proceeds from the sales to pay down debt.

The assets being sold to ScissorTail involve various gas processing plants and 2,800 miles of gathering pipeline.

Crosstex is paying $66.35 million for its package, which includes the AIM Pipeline System (previously known as Mississippi Fuels), and a 12.4% interest in the Seminole gas processing plant in Gaines County, Tex. The plant, operated by Amerada Hess, is completing a capacity expansion to 210 MMcfd from 150 MMcfd, CrossTex said.

Crosstex Pres. and CEO Barry E. Davis said, "The acquired assets provide us with a new core area for growth in central Mississippi, as well as the opportunity to enter into a new business niche of carbon dioxide separation in a key area of West Texas."

In addition, Crosstex is buying the Conroe gas plant and gathering system. The cryogenic gas processing plant has 10 miles of gathering pipelines within Montgomery County, Tex.

The transaction also includes the Black Warrior Pipeline system's 125 miles of gathering systems in Ala., and two smaller systems, Aurora Centana and Cadeville, in Louisiana.

A gas gathering and processing business, DEFS is a joint venture that combined the midstream units of Duke Energy Corp, Charlotte, NC, and ConocoPhillips, Houston. Duke Energy owns 70% and ConocoPhillips owns 30% of the JV.