Exco Says Sale of TGGT Unit May Garner Up to $1.4 Billion
Exco, which owns half of the venture, may get $500 million to $700 million from a sale, Chief Executive Officer Douglas H. Miller said on a conference call with analysts today. Exco, a Dallas-based natural-gas producer, failed in a bid earlier this year to sell a one-third stake in TGGT.
TGGT transports about 1.6 billion cubic feet a day, mostly from gas fields in Louisiana, according to slides posted for Exco’s quarterly earnings call. Exco, struggling with gas prices at 10-year lows, would use sale proceeds to pay down debt and buy acreage in fields that produce oil. A deal on the pipeline system may come within weeks, Miller said.
“I’d love to say 30 days right now, but give me 30 to 60,” Miller said.
BG, based in Reading, U.K., is scheduled to release its quarterly earnings tomorrow.
“We’re in discussions with third parties about the sale of TGGT,” Mark Todd, a spokesman for BG, said in a phone interview today. “Exco is leading that process.”
Exco yesterday reported a $281.7 million loss for the first quarter, compared with net income of $21.9 million for the same period a year earlier. The results include a writedown of oil and gas properties as the company’s average sale price fell 37 percent from the same period last year.
The shares, which have dropped 32 percent this year, fell 4.3 percent to $6.99 at the close in New York.
Exco said on Feb. 3 it had entered a 45-day exclusive negotiation period with an unidentified private infrastructure fund to sell a one-third stake in TGGT. Those discussions expired without a deal.
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