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Dominion and Enbridge Complete $6.6 Billion Utility Transaction
03/20/2024
Enbridge Inc. has completed a $6.6 billion purchase of The East Ohio Gas Co., an Ohio natural gas company, from Dominion Energy. This acquisition is part of a larger $14 billion merger and acquisition deal previously announced by the two companies. The East Ohio Gas Co. will operate under the new name Enbridge Gas Ohio (EOG) and become part of Enbridge's Gas Distribution and Storage Business Unit, including taking on some debt as mentioned by Dominion.
EOG is set to provide over 40% of the yearly EBITDA expected from the three gas utilities Enbridge is buying from Dominion. The purchases of Questar Gas Co., Wexpro companies, and the Public Service Company of North Carolina from Dominion are still in progress, with Enbridge planning to finalize these in 2024 after getting the necessary regulatory approvals.
EOG serves over 1.2 million customers in Ohio alone, boasting a significant infrastructure network that includes over 22,000 miles of pipelines for transmission, gathering, and distribution, as well as underground storage and connections to several major interstate pipelines and natural gas producers.
Adding a big gas company from Ohio to Enbridge's business is a smart move. Michele Harradence, who leads Enbridge's gas distribution and storage, says this helps the company grow and keep making steady money. Gas companies are important because they provide safe and affordable energy that people need for a long time.
This new addition will help Enbridge make more money steadily until the end of the decade. It's a good investment that matches their plan to pay regular dividends to their shareholders. Also, with this purchase, Enbridge now works in all its business areas in Ohio, which means more chances to do well and make money.
Dominion Energy, with its headquarters in Richmond, Virginia, serves about 6 million customers across 15 states with electricity and natural gas. The company has set a commitment to achieve Net Zero emissions by 2050.
About Enbridge
Enbridge, based in Calgary, Canada, manages 30% of North America's crude oil transportation and nearly 20% of the US's natural gas, with the world's most complex liquid transportation system extending 17,809 miles. Following a significant acquisition in September 2023, it became North America's largest gas utility by volume. A pioneer in renewable energy, Enbridge is committed to achieving net-zero greenhouse emissions by 2050, focusing on sustainability and reducing emissions intensity by 35% by 2030. Its gas transmission network, vital for LNG exports, moves about 24.6 billion cubic feet of natural gas daily across key markets in North America.
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Pembina (PBA) to Acquire Enbridge's Joint Ventures for $2.3 Billion - C$3.1 Billion
Pembina Pipeline Corporation PBA, a well-known player in the Canadian midstream sector, recently announced its plan to acquire Enbridge Inc.'s remaining shares in the Alliance Pipeline, Aux Sable pipelines, and NRGreen joint ventures. The deal, valued at C$3.1 billion or US$2.3 billion, marks a key step for Pembina in asserting its leadership in North America's natural gas transportation sector. This strategic acquisition is expected to considerably boost Pembina's growth and profitability in the coming years.
A $2 billion deal saw Dominion Energy sell Questar Pipelines to Southwest Gas
A good asset will not sit on the market for long. After a deal with Berkshire Hathaway fell through, Dominion Energy managed to secure another one for Questar Pipelines in a drop of a hat. And get that, it is better than the former one by more than half a billion! Although not everyone is happy with such decisions, it seems that even Carl Icahn’s complaints won't be able to sway Southwest Gas Holdings’ decision. Though we will have our eyes peeled in any case… If everything goes as planned, a $2 billion deal will be closed before the end of the year.
OXY has been the leader in Permian Basin production for the past five years. Currently, the Houston-based oil and gas company is deepening its presence in the basin with a $12 billion acquisition of CrownRock, adding over 94,000 acres in the Midland Basin and increasing its oil output by about 170,000 barrels per day. Occidental announced an increase in its proved reserves to 4.0 billion barrels of oil equivalent by the end of December 2023, up from 3.8 billion the previous year. Activities in the Permian largely fueled this rise. Occidental added approximately 303 million barrels through infill development projects as well as new discoveries and the further development of existing fields brought in another 153 million barrels.
TotalEnergies kicked off 2024 with a net income of $5.7 billion in the first quarter, marking a modest 3% increase from the same period last year and a 13% rise from the previous quarter. This growth occurred despite experiencing drops in both the volume and price of gas sales over the year and the quarter. Their adjusted net earnings, which exclude one-time or unusual items, were $5.1 billion. This represents a significant 22% decline compared to last year and a slight 2% drop from the last quarter. The company's earnings before tax, depreciation, and amortization reached $11.5 billion, while their cash flow from operations significantly decreased to $2.2 billion, falling by 58% from last year and a steep 87% from the previous quarter. TotalEnergies also recorded $644 million in impairments.
New Mexico leads the Rockies region in gas production and ranks as the sixth-largest in terms of active gas wells in the U.S. Last year, the state's gas well count slightly increased by 0.2% to 30,699, with new additions in both the northwestern San Juan Basin and the southeastern Permian Basin. Meanwhile, just to the north in Colorado, gas producers grew by a modest 0.1% to 30,322, primarily due to increased drilling activity in the DJ and Piceance basins. Wyoming saw a decline in its active gas wells by 3.7%, down to 17,006, with production mainly in Sublette, Sweetwater, and Converse counties reflecting stable or slightly reduced drilling activity. Utah also experienced a slight decrease of 0.2% in its number of gas wells, totaling 6,463. In Q1 2024, oil and gas industry activity in Oklahoma, Colorado, and northern New Mexico experienced a decline. This marks the fifth consecutive quarter of contraction in drilling and business activities within these regions. According to a survey that included responses from 33 firms operating in the Rockies, this downtrend is expected to continue over the next six months.