California utilities group to buy portion of gas field in Wyoming

July 06, 2005|By THE DENVER POST

With natural gas prices high and supplies tight, a group of California utilities has purchased part of a prolific Wyoming gas field from Denver investor Philip Anschutz.

The Southern California power companies paid $300 million to Anschutz Pinedale Corp. for 38 oil and gas wells on 1,800 acres of the Pinedale Anticline, a fast-developing natural gas field in southwest Wyoming.

The purchase - rare, but not unheard of - suggests a potential trend of utilities buying gas production to lock in supplies and prices, energy analysts said.

"The strategic nature of controlling their own gas reserves is appealing to utilities," said Tom Petrie of Denver-based energy investment banker Petrie Parkman & Co., which handled the transaction for the Southern California Public Power Authority.

Anschutz Pinedale will continue to explore for and produce natural gas from its remaining undeveloped 8,000 acres in the Pinedale Anticline, Anschutz spokesman Jim Monaghan said.

The Pinedale field has estimated reserves of 10 trillion to 15 trillion cubic feet of natural gas, one of the biggest U.S. gas discoveries in two decades.

The gas will be shipped by pipeline for use in a new power plant in Burbank, Calif., which will supply enough electricity for about 250,000 homes.

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