Loews Corporation announced it has agreed to purchase natural gas exploration and production assets at a cost of $4.025 billion from Dominion Resources. The primary assets and properties are located in Texas, Michigan and Alabama. Loews' CEO commented: "These long-lived and low-risk natural gas producing assets represent an excellent platform for Loews to enter the exploration and production business. We have a favorable long-term view of natural gas pricing in the US and believe natural gas will increasingly be the fuel of choice in the future." The deal is expected to close during Q3 subject to customary conditions. Reuters reports the acquisition is part of another transaction in which Dominion will sell other U.S.-based natural gas and oil exploration operations to XTO Energy for $2.5b. Loews is untraded so far in pre-market trading; Dominion is up 0.7% to $88.25, and XTO is trading nearly 5% higher to $61.18.
Sources: Press release, Reuters
Commentary: XTO Energy: Best Track Record In Energy Stocks • Oil Deals and Debacles • GS and MS Dominion Buyout: Liar's Poker
Stocks/ETFs to watch: Dominion Resources Inc. (NYSE:D), Loews Corp. (LTR), XTO Energy Inc. (XTO). ETFs: Utilities Select Sector SPDR (NYSEARCA:XLU), Utilities HOLDRs (NYSEARCA:UTH), iShares Dow Jones US Oil & Gas Ex Index (NYSEARCA:IEO)
Conference call transcripts: Dominion Resources Q1 2007
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