Dominion’s $6.5 Billion Asset Sale

By Douglas A. McIntyre Published Jun 4, 8:30AM EDT

Dominion Resources Inc. (D-NYSE) has been trying to trim down its focus on more core assets via assets sales and select combinations. This morning the company has enetered into two seperate asset sales in a combined deal worth more than $6.5 Billion.

Loews Corporation (LTR-NYSE) is buying Dominion’s operations in the Permian Basin, Michigan and Alabama for $4.025 billion, including reserves of approximately 2.5 TCFE on Dec. 31, 2006.

XTO Energy Inc. (XTO-NYSE) is buying Dominion’s operations in the Rocky Mountains, Gulf Coast, San Juan Basin and South Louisiana for $2.5 billion; including proved reserves of approximately 1 TCFE on Dec. 31, 2006.

The company says it now has enough data on a post-sale basis for forward investment models. Domonion is internally projecting 2008 fiscal operating earnings per share to come in at $6.00 per share, with 4% to 6% growth thereafter. Here is a site link for its newer 2008 model on a post-sale basis. http://www.dom.com/investors/ir.jsp

XTO is an obvious play, but Loews Corp was a bit of a surprise from an outsider’s viewpoint. Loews does already own LNG storage and pipeline operations, but many were not expecting the company to spend this much to add on to LNG operations.

Jon C. Ogg
June 4, 2007

Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

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A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.