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Gas News Release
June 17, 1999
CNG Producing to Buy South Texas Gas Fields for $125 Million
CNG Expects 25 Percent Annual Production Increase
in 1999 PITTSBURGH, - Consolidated
Natural Gas Company announced today that its exploration and production (E&P)
subsidiary, CNG Producing Company, has entered into a definitive purchase agreement
to acquire interests in Lopeño and two adjacent South Texas natural gas fields.
Earlier in the year, CNG Producing purchased about a 50 percent
interest in the Lopeño field, and together with the most recent purchase, CNG
Producing will own nearly a 100 percent interest in Lopeño. On a combined basis,
the company will pay $125 million for the two transactions. Lopeño and the adjacent
fields, located in Zapata County, Texas, contain 50 active wells with current
working interest production of 56 million cubic feet of natural gas a day. The
final transaction should be closed by late summer after completion of due diligence.
"Lopeño is a relatively new field with long-lived reserves
that provide a nice balance to our Gulf of Mexico base," said Pat Riley,
president of CNG Producing Company. "The field has numerous development
drilling opportunities that will help us to sustain our production growth objectives
while maintaining one of the lowest cost structures in the industry."
As a result of the acquisitions, CNG's exploration and production
capital spending in 1999 will increase to about $465 million, up $139 million
from the originally approved budget of $326 million.
"We are using CNG's financial strength to take advantage
of opportunities we see in exploration and production," Riley said. "While
many other companies have curtailed capital investments in 1999, we have increased
our spending to take advantage of the current environment. At $465 million,
CNG will have one of the five largest domestic E&P budgets in the country
for an independent oil and gas company."
CNG is now targeting 1999 production at 250 Bcfe, about a
25 percent increase over 1998's record production level. The increase is attributable
to new production from the Nautilus/Nemo/Atlantis complex in the Gulf of Mexico,
which came on line during the first quarter; additional production from the
previously announced West Cameron Block 76 field development wells in the Gulf
of Mexico; as well as the South Texas acquisitions.
CNG Producing Company explores for and produces natural gas
and oil throughout the United States and in Canada. It is a subsidiary of Pittsburgh-based
Consolidated Natural Gas Company (NYSE: CNG), one of the nation's largest producers,
transporters, distributors and retail marketers of natural gas.
This press release contains forward-looking statements. The
company wishes to caution readers that the assumptions which form the basis
for forward-looking statements with respect to or that may impact earnings for
fiscal 1999, and thereafter, include many factors that are beyond the company's
ability to control or estimate precisely, such as estimates of future market
conditions and the behavior of other market participants. Other factors include,
but are not limited to, weather conditions, economic conditions in the company's
service territory, fluctuations in energy-related commodity prices, conversion
activity, other marketing efforts and other uncertainties.
CNG's recent news releases are available 24 hours a day on
the Internet, by fax machine, or by voice recording. On the Internet, use CNG's
Web site: www.cng.com For faxing, call 1-800-758-5804 on a touch-tone phone
and enter CNG's company extension, which is 203456. From a menu, you will then
be able to select releases that will be faxed to you immediately without charge.
For voice recordings, call 1-888-CNG-NEWS. This line is toll-free.
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For further information contact:
Dan Donovan
412-690-1370
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