- The Washington Times - Monday, April 30, 2007

RICHMOND (AP) — Dominion Resources Inc. said yesterday it plans to sell its offshore U.S. oil and natural gas business to a subsidiary of Italian energy company Eni SpA for $4.76 billion.

The deal with Eni Petroleum Co. includes about 967 billion cubic feet equivalent of natural gas and oil reserves in the Gulf of Mexico, about 15 percent to 18 percent of Dominion’s proven reserves. Average daily production last year was 503 million cubic feet, Dominion said.

The sale is part of the Richmond energy company’s previously announced plan to refocus on its electric generation and energy distribution, transmission, storage and retail operations. Proceeds of the deal will be used to reduce debt, buy back shares and to acquire other energy assets, the company said.

“Dominion has been extremely successful in [exploration and production] operations, but that success has not been fully reflected in our share price,” Chief Executive Officer Thomas F. Farrell II said in announcing the deal, which is expected to be completed July 2.

Shares of Eni rose 0.4 percent to $33.34 in Milan trading. Dominion shares fell 35 cents to close at $91.20 on the New York Stock Exchange.

Shelby G. Tucker, an analyst with Banc of America Securities, said the sale price for the Gulf of Mexico operations was well above the $3.2 billion to $3.6 billion range he had estimated. Banc of America analysts had previously said that for every $500 million difference from the estimated sale price, Dominion’s estimated stock value would change by $1 per share.

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