2 Dallas Natural Gas Firms Plan IPOs
By Sudeep Reddy, The Dallas Morning News
Jan. 30–Two Dallas natural gas firms are scheduled to conduct initial public offerings this week.
Regency Energy Partners LP and Energy Transfer Equity LP will be riding a strong wave in the midstream natural gas sector, among the firms that gather, process and transmit gas heading from producers to distributors.
Investment in the midstream sector has soared over the last four years as the nation’s natural gas industry faces tight supplies and surging prices.
Increased drilling in fields such as North Texas’ Barnett Shale has raised demand for gas-processing and transmission services.
Hicks Muse Tate & Furst Inc. formed Regency Energy Partners in September to run Regency Gas Services LLC, which it acquired in late 2004 for $405 million.
The offering of 12.5 million limited partnership units, priced between $19 and $21 each, is likely to raise about $233.4 million. Most of that would be used to pay off Hicks Muse investors and replenish working capital.
Energy Transfer Equity LP plans to offer 17.5 million limited partner units at $19 to $21 each.
The firm’s assets would include half the incentive distribution rights and almost a third of the outstanding common units in Energy Transfer Partners LP, which went public in November 2003.
The company said it expects net proceeds of about $327.8 million. More than half of that would pay down debt, with the rest going toward acquiring shares in Energy Transfer Partners and for general partnership purposes.
Energy Transfer Equity plans to trade on the New York Stock Exchange under the ticker symbol “ETE.” Regency expects to trade under “RGNC” on the Nasdaq.
E-mail sreddy@dallasnews.com
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