As OGE IPO Nears, Execs Shop for Backers
By Don Mecoy, The Oklahoman
Jan. 17–Executives from OGE Energy Corp. hit the road Wednesday to pitch potential investors on the planned initial public offering for OGE Enogex Partners LP.
Later this month, the Oklahoma City company will issue 7.5 million common units priced between $18 and $20 per unit. In November, the company estimated those units would price between $19 and $21.
Officials from the company and the Oklahoma City underwriters declined to comment on the initial public offering, citing a mandated quiet period.
The partnership units will trade on the New York Stock Exchange under the ticker symbol “OGP.”
The 7.5 million units offered to the public represent a nearly 30 percent interest in the partnership. Following the offering, a subsidiary of OGE Energy will own a 68.2 percent limited partner interest in OGE Enogex.
The company expects to clear about $132.5 million from the offering.
OGE Enogex Partners plans to combine the proceeds with a short-term $300 million loan from OGE Energy and $13.9 million borrowed under a new credit agreement to redeem its $400 million, 8.125 percent senior notes due 2010.
The company, which must distribute its cash on hand at the end of each quarter, expects to distribute $1.35 each year to unit holders.
OGE Enogex generated net income of $20.6 million for the nine months ending Sept. 30.
At that time, the company controlled assets that were valued at $1 billion and had $314 million in long-term debt.
About the company
OGE Enogex was formed by energy services provider OGE Energy Corp., the parent company of utility Oklahoma Gas and Electric Co., to develop its natural gas midstream assets and operations.
OGE Enogex owns and operates about 2,283 miles of intrastate natural gas transportation pipelines in Oklahoma and the Texas Panhandle and two natural gas storage facilities with about 23 billion cubic feet of total working gas capacity.
The company also owns and operates 5,474 miles of natural gas gathering pipelines and six natural gas processing plants with about 720 million cubic feet per day of aggregate inlet capacity. OGE Enogex has a 50 percent stake in an additional natural gas processing plant, which it operates.
OGE Enogex’s two largest customers are the state’s two major electric utilities, Oklahoma Gas and Electric and Public Service Co. of Oklahoma, which pay the company to deliver natural gas to their power plants. UBS Investment Bank, Lehman Brothers, Citi, JPMorgan, Wachovia Securities, BOSC Inc. and Capital West Securities Inc. are underwriting the offering. The underwriters have the option to buy up to an additional 1.1 million common units at the offering price to cover any overallotments.
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Copyright (c) 2008, The Oklahoman
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