Washington Gas to Invest $126 Million in Natural Gas Reserves Utilizing New Virginia Law
May 06 2015 - 7:15PM
Business Wire
Washington Gas, a subsidiary of WGL Holdings, Inc. (NYSE:WGL),
has signed a conditional purchase and sale agreement with Energy
Corporation of America (ECA) to acquire natural gas reserves
through working interests in producing natural gas wells in
Pennsylvania’s Appalachian Basin. The investment of approximately
$126 million in physical natural gas reserves enables Washington
Gas to secure a long-term supply of natural gas that is expected to
generate substantial savings for Virginia customers over the
20-year investment period.
“Washington Gas is pleased to announce this important
partnership with ECA,” said WGL and Washington Gas Chairman and
Chief Executive Officer, Terry D. McCallister. “This opportunity to
invest directly in low-cost natural gas supplies will help to
reduce gas price volatility impacts and provide expected savings to
our Virginia customers.”
The purchase of the reserves is conditional upon approval by the
Virginia State Corporation Commission. Washington Gas expects to
file its proposal with the Commission within a week. The agreement
with ECA is the first announced transaction to be filed under a
2014 Virginia law that allows natural gas utilities to recover
investments in strategic natural gas facilities that provide cost
savings, reduce price volatility or reduce supply risk to utility
customers.
The acquired assets include 22 producing wells in Greene County,
Pennsylvania, and three producing wells in Clearfield County,
Pennsylvania, all of which will be operated by ECA.
“From our perspective, ECA’s more than 50 years of production
experience in the Appalachian Basin combined with Washington Gas’
long history of reliable delivery of natural gas will serve for a
great partnership,” said ECA Chief Executive Officer John Mork.
ECA is one of the premier operators in the region and currently
operates more than 4,600 wells throughout Appalachia.
KeyBanc Capital Markets acted as exclusive financial advisor to
Washington Gas.
About WGL:
WGL (NYSE-WGL), headquartered in Washington, D.C., is a leading
source for clean, efficient and diverse energy solutions. With
activities and assets across the U.S., WGL consists of Washington
Gas, WGL Energy, WGL Midstream and Hampshire Gas. WGL Energy
delivers a full ecosystem of energy offerings including natural
gas, electricity, green power, carbon reduction, distributed
generation and energy efficiency provided by WGL Energy Services,
Inc. (formerly Washington Gas Energy Services, Inc.), WGL Energy
Systems, Inc. (formerly Washington Gas Energy Systems, Inc.) and
WGSW, Inc. WGL provides options for natural gas, electricity, green
power and energy services, including generation, storage,
transportation, distribution, supply and efficiency. Our calling as
a company is to make energy surprisingly easy for our employees,
our community and all our customers. Whether you are a homeowner or
renter, small business or multinational corporation, state and
local or federal agency, WGL is here to provide Energy Answers. Ask
Us. For more information, visit us at www.wgl.com.
About ECA:
Founded in 1963, Energy Corporation of America (ECA) is a
privately held company that actively pursues the exploration,
extraction, production, and transportation of natural gas and oil,
both in the United States and around the world. ECA owns and
operates approximately 4,600 wells, 5,000 miles of pipeline, and a
million acres in North America alone. Since its inception, ECA has
been deeply committed to its employees and their families. Through
the use of profit sharing, a stock ownership program, an education
program, and its award-winning wellness program, ECA facilitates
the development of its employees in all areas.
Forward-Looking
Statements
This press release includes forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
with respect to the cost of the purchased gas supplies relative to
market prices, the amount of volatility of gas supply prices and
savings to customers, the level of output of the wells during the
investment period, the timing of our filing of our proposal with
the Virginia State Corporation Commission, and other future
expectations. Forward-looking statements are typically identified
by words such as, but not limited to, “estimates,” “expects,”
“anticipates,” “intends,” “believes,” “plans,” “forecasts,” and
similar expressions, or future or conditional verbs such as “will,”
“should,” “would,” and “could.” Although we believe such
forward-looking statements are based on reasonable assumptions, we
cannot give assurance that every objective will be achieved.
Forward-looking statements speak only as of today, and we assume no
duty to update them. Factors that could cause actual results to
differ materially from those expressed or implied include, but are
not limited to, the production of the wells in which we purchased a
working interest, natural gas price levels and volatility, the
effectiveness of ECA in operating the wells, counterparty risks,
the timing of our filing of our proposal with the Virginia State
Corporation Commission, whether the Virginia Corporation Commission
approves our proposal, general economic conditions and the factors
discussed under the “Risk Factors” heading in our most recent
annual report on Form 10-K and other documents filed with or
furnished to the Securities and Exchange Commission.
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WGL Holdings, Inc.News Media:Ruben Rodriguez,
202-750-4470orFinancial Community:Douglas Bonawitz,
202-624-6129
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