FW Gas Firm to Be Acquired: $1.6 Billion Deal for Sid Richardson Energy to Cut Basses' Holdings
Posted on: Saturday, 17 December 2005, 15:00 CST
By Elizabeth Souder, The Dallas Morning News, The Dallas Morning News
Dec. 17--Southern Union Co. said Friday it will buy Fort Worth's Sid Richardson Energy Services for $1.6 billion.
The definitive agreement, which includes natural gas gathering, processing, marketing and pipeline liquids operations, trims the energy holdings of the Fort Worth Bass family.
Privately held Sid Richardson Energy Services has about 4,600 miles of natural gas pipelines in the Permian Basin.
That boosts Southern Union's pipeline operation to 22,000 miles across the U.S. and Canada, the company said. Southern Union said the acquisition will raise earnings next year.
"We feel this is a major acquisition for us and one that we're very happy with," said Southern Union chief executive George Lindemann in a conference call Friday.
Wildcatter Sid Richardson founded the company in 1947 to enhance his West Texas oil holdings. He and his nephew, Perry Bass, expanded the company.
The Bass family has other energy operations outside of the Sid Richardson companies.
The Sid Richardson Carbon Co., which makes furnace black, isn't for sale, said a spokesman.
The boards of Sid Richardson Energy and Southern Union, which is based in Scranton, Pa., have approved the deal. It is set to close in the first quarter.
The sale comes at a time when Texas is seeing a number of natural gas companies change hands. Some experts say Texas is on the verge of a merger and acquisition boom as natural gas prices remain high and technology improves to extract more gas from the ground.
But other industry players are more cautious, concerned that bids could go high and natural gas prices could fall.
Southern Union chief financial officer Julie Edwards addressed that concern in the conference call, assuring listeners the company has hedged some of its exposure to natural gas markets.
"We understand that there's some skepticism in the market regarding this move into a business that is exposed to commodity risk. Long-term, we are really energy bulls as it relates to pricing, but we understand it is volatile and we don't need to be stepping in at a high and leaving ourselves in a vulnerable position," she said.
E-mail esouder@dallanews.com
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Source: The Dallas Morning News
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