Williams Cos Affirmed Its Strong Interest In Acquiring Southern Union Company

- Williams Cos Affirmed Its Strong Interest In Acquiring Southern Union Company



Aug 17, 2011

Williams Cos (NYSE:WMB) affirmed its strong interest in acquiring Southern Union Company (NYSE:SUG) for $44 per share in cash. The all-cash proposal represents value certainty of $44 per share to Southern Union shareholders, which is a premium of 4% over the implied value of the agreement with Energy Transfer Equity (NYSE:ETE) of $42.32.

Alan Armstrong, president and chief executive officer said, "Forty-four dollars a share, cash, for every shareholder is a superior offer for Southern Union's shareholders. Southern Union's current agreement with Energy Transfer includes illiquid partnership units whose value will be exposed to equity markets in the months until closing and beyond."

The Williams Cos has a potential upside of 25% based on a current price of $28.15 and an average consensus analyst price target of $35.2.

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Chevron Sells Union Oil Cook Inlet Assets to Independent

- Chevron Sells Union Oil Cook Inlet Assets to Independent

Thursday, July 21, 2011
Knight Ridder/Tribune Business News
by Lisa Demer, Anchorage Daily News, Alaska

Chevron, the biggest oil and gas operator in Cook Inlet, is selling its assets there to an independent company, Hilcorp Alaska LLC.

Chevron and Hilcorp announced Tuesday that Chevron's subsidiary, Union Oil Co. of California, is selling contracts and interests in the Granite Point, Middle Ground Shoals, Trading Bay and MacArthur River fields.

The sale to Hilcorp also covers Chevron's interests in 10 offshore platforms, onshore gas fields, two gas storage facilities and two pipeline companies.

Terms were not disclosed. The companies said the deal should close by the end of the year, after it clears regulatory steps. Chevron plans to maintain its interests in Alaska's North Slope fields and the trans-Alaska oil pipeline.

The current net production for Chevron in Cook Inlet is 3,900 barrels of oil and 85 million cubic feet of natural gas per day, the company said.

A state senator from Kenai said the changeover should be good for Cook Inlet production. An environmentalist said he wanted to look into whether the new player has the will and the ability to invest in Cook Inlet's crumbling infrastructure.

Hilcorp is one of the biggest privately held oil and natural gas exploration and production companies in the United States, but it is dwarfed by big producers like Exxon Mobil, BP and Conoco Phillips.

"The standard pattern is the majors come in and pick the low-hanging fruit, and then the independents and juniors come in and mop up," said Bob Shavelson, executive director of the environmental advocacy group Cook Inletkeeper. "The biggest question is: Do they have the assets to deal with aging infrastructure in Cook Inlet?"

Some of the platforms date back to the post-statehood era of the late 1960s, and there are serious maintenance and corrosion issues, Shavelson said.

Sen. Tom Wagoner, R-Kenai, said he didn't think Hilcorp would be making the deal if it wasn't ready to invest.

"They have looked at the assets. They know what's here in Cook Inlet," said Wagoner, who got a call from Hilcorp about the sale Tuesday.

Hilcorp may be better situated for upgrading and expanding than Chevron, which has numerous projects around the world competing for its investment dollars, the senator said.

Hilcorp, headquartered in Houston, Texas, operates in nine areas including the Gulf Coast and the Rockies. It has more than 700 employees and is actively growing. It's been recognized for a progressive corporate culture. Last year, the Houston Chronicle ranked Hilcorp the No. 1 midsize workplace.

Wagoner said he hopes Cook Inlet workers hold onto their jobs.

"Those are the people I worry about," Wagoner said. "Those platforms -- those are a lot of jobs in Cook Inlet. Most of those people are my neighbors."

The Hilcorp acquisition comes after the federal government announced there's far more oil and natural gas in Cook Inlet than previously thought.

Copyright (c) 2011, Anchorage Daily News, Alaska

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Energy Transfer, Southern Union Reach $5.7B Deal

- Energy Transfer, Southern Union Reach $5.7B Deal

Tuesday, July 19, 2011
Dow Jones Newswires
HOUSTON
by Ben Lefebvre

Southern Union agreed to a sweetened $5.7 billion cash-and-stock buyout offer from Energy Transfer Equity, spurning a bid from rival suitor Williams Cos.

The agreement is the latest maneuver in a bidding war that has added more than a billion dollars to Energy Transfer's opening $4.2 billion bid for Southern in mid-June. Energy Transfer and Williams have competed to merge their pipeline assets with those of Southern, with the winner expected to become the largest natural gas pipeline operator in the country.

Williams, whose most recent bid was for $5.6 billion on July 14, said it was "evaluating its options."

Enterprise and Williams have hoped that combining their position in prolific natural gas production areas with Southern's access to markets will make them better able to transport natural gas through what is becoming an increasingly congested system. The glut has been brought about by new drilling technology, which in the past decade has unlocked an unprecedented natural gas bounty from shale formations across the U.S.

The combined company will have capacity to move more than 30 billion cubic feet a day of natural gas--nearly half of the natural gas produced in the U.S.--along nearly 45,000 miles of pipeline.

Southern shareholders may have been swayed by Energy Transfer's use of stock in the deal, which would offer tax benefits and dividends, analysts have said. Energy Transfer's assets in Texas might also fit easier with Southern's position in markets in the Midwest and Florida, said Morningstar analyst Avi Feinberg.

"I think Energy Transfer has the best natural fit with Southern Union," Feinberg said in an interview.

Under Energy Transfer's latest offer, Southern Union holders can elect to receive $44.25 in cash or one Energy Transfer Equity common unit, worth $44.03 as of Monday's close. The total value of the deal, including debt assumption, is about $9.4 billion.

Williams may find going above $44 a share problematic, as the amount could be more than Southern might be worth to shareholders, BMO Capital Markets analysts have said.

Energy Transfer on Tuesday also reached an amended agreement to sell Southern Union's 50% interest in Citrus Corp., owner of the Florida Gas Transmission pipeline system, to Energy Transfer Partners LP for $2 billion. Regulators are requiring Energy Transfer Equity to sell the stake when the Southern Union acquisition closes.

Copyright (c) 2011 Dow Jones & Company, Inc.

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Energy Transfer Equity, Southern Union Announce Amended Merger Agreement

-  Energy Transfer Equity, Southern Union Announce Amended Merger Agreement



Jul 19, 2011

Energy Transfer Equity (NYSE:ETE) and Southern Union (NYSE:SUG) announced that they have entered into an amended and restated merger agreement under which Energy Transfer Equity will acquire Southern Union for $9.4B, including $5.7B in cash and Energy Transfer Equity common units. Under the terms of the revised agreement, which has been unanimously approved by the boards of directors of both companies, Southern Union shareholders can elect to exchange their common shares for $44.25 of cash or one Energy Transfer Equity common unit.

Shares of Southern Union are trading up over 2% to $44.23 on the news.

Energy Transfer Equity has a potential upside of 16.7% based on a current price of $43.86 and an average consensus analyst price target of $51.17.

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Williams Responds to Southern Union's Decision to Engage in Discussions

-  Williams Responds to Southern Union's Decision to Engage in Discussions



Jul 15, 2011

Williams (NYSE:WMB) commented on the announcement by Southern Union Co. (NYSE:SUG) that the Special Committee of its Board of Directors has authorized Southern Union to engage in discussions with Williams regarding Williams' $44.00 per share all-cash proposal to acquire all the outstanding shares of Southern Union. The Special Committee of Southern Union made the determination to engage in discussions and to provide information to Williams pursuant to Section 5.4 of Southern Union's merger agreement with Energy Transfer Equity, L.P. (NYSE:ETE).

Alan Armstrong, Williams' President and CEO said, "We are confident that our all-cash, premium proposal is in the best interests of both companies' shareholders, and we are pleased that Southern Union will engage in discussions with Williams. We look forward to working together with Southern Union and to quickly executing a definitive merger agreement."

Williams has a potential upside of 23.7% based on a current price of $29.74 and an average consensus analyst price target of $36.8.

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Williams Raises Bid for Southern Union to About $5.6B

- Williams Raises Bid for Southern Union to About $5.6B

Thursday, July 14, 2011
Dow Jones Newswires
by Ben Lefebvre

Williams Cos. raised its bid for Texas pipeline company Southern Union to about $5.6 billion in cash in the latest round of a takeover battle with Energy Transfer Equity.

Williams latest bid tops Energy Transfer's previous $5.1 billion cash-and-stock offer and its own previous bid of $5 billion in cash. The two companies have been competing to merge with Southern, with the winner of the competition expected to become the country's largest natural-gas pipeline company.

Williams said it hopes to have an agreement hammered out with Southern by Tuesday, which it maintains is enough time to share business data with Williams and hold the necessary management meetings to get approval.

"It's fairly simple as to what we have to offer," Williams Chief Executive Allan Armstrong said in an interview. "We don't think the decision process is real complex."

Representatives of Southern and Energy Transfer were not immediately available to comment.

Williams all-cash bid might be simple, but in the end it might not be as compelling as the company is portraying, said Morningstar equities analyst Jason Stevens said. Morningstar values Energy Transfer's cash-and-stock offer at $46 a share--higher than William's $44 a share offer--because of tax benefits and dividends the stock portion of the deal would offer. A merger with Southern might also force Williams to sell some of its pipeline assets in Florida to win over antitrust regulators, Stevens said.

"They'd have to sell their premiere assets," Stevens said. "It's just not as compelling an offer."

It might be difficult for Williams to go any higher than its current 10% premium to Energy Transfer's current offer, said BMO Capital Markets analyst Carl Kirst.

"Williams paying more than $44 would start facing investor blowback given the premium involved," Kirst said in an investors note.

Energy Transfer and Southern Union last week set a deal initially valued at $40 a share, four dollars lower than Williams's latest bid. Energy Transfer also agreed to sell some assets in order for the deal to pass muster with antitrust regulators.

The companies also raised the breakup fee for their agreement to $162.5 million from $92.5 million in the original agreement, another indication that a higher bid was expected. Williams in its latest bid said it would pay the breakup fee and related expenses for Southern.

Both companies had expressed willingness to assume Southern's debt, totaling $3.7 billion.

Copyright (c) 2011 Dow Jones & Company, Inc.

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Union Drilling Enters Multi-Year Contract for New Rigs

- Union Drilling Enters Multi-Year Contract for New Rigs

Wednesday, July 06, 2011
Union Drilling Inc.

Union Drilling has entered into contracts to purchase two new drilling rigs based upon executed three-year contracts with a long-standing customer. The 1,500 horsepower AC electric drilling rigs, designed for pad drilling and efficient rig moves, have an aggregate cost of approximately $35 million. Upon completion, which is expected in the first quarter of 2012, the rigs will be deployed to Arkansas for work in the Fayetteville Shale.

Christopher D. Strong, Union Drilling's President and Chief Executive Officer, stated, "This type of investment is exactly what we had in mind when we entered into an expanded revolving credit facility earlier this year. These two new rigs represent an excellent opportunity to generate attractive returns for our shareholders while expanding our relationship with a key customer."

Since January 2011, the Company has added two 1,000 horsepower rigs to its fleet and two more 1,000 horsepower rigs are expected to be completed for operations in the Marcellus Shale by the end of 2011.

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Energy Transfer Ups Southern Union Bid

- Energy Transfer Ups Southern Union Bid

Tuesday, July 05, 2011
Energy Transfer Equity L.P.

Energy Transfer Equity and Southern Union have entered into an amended and restated merger agreement under which ETE will acquire SUG for $8.9 billion, including $5.1 billion in cash and ETE common units.

Under the terms of the revised agreement, which has been unanimously approved by the boards of directors of both companies, SUG shareholders can elect to exchange their common shares for $40.00 of cash or 0.903 ETE common units. The maximum cash component is 60% of the aggregate consideration and the common unit component can fluctuate between 40% and 50%. Elections in excess of either the cash or common unit limits will be subject to proration.

The revised purchase price represents a significant increase in value being paid to SUG shareholders and more than a 42% premium to the closing price of SUG common stock on June 15, 2011, the last trading day prior to the announcement of the original merger agreement.

The revised agreement provides, at the SUG shareholders' option, certainty of value through substantial cash consideration per SUG share and significant potential upside from ETE common units at a compelling fixed exchange ratio and on a tax-deferred basis. The merger is not subject to any financing contingency as ETE has secured approximately $3.3 billion in committed financing from Credit Suisse to fund the cash consideration to SUG shareholders.

"We have listened to SUG shareholders and are providing a superior yet simpler transaction, including a significant cash component and the opportunity to benefit from ETE's upside through the ownership of ETE common units," said Kelcy Warren, ETE's Chairman of the Board of Directors and largest unitholder. "The revised ETE / Southern Union agreement delivers superior value, highly compelling equity participation and certainty to close for SUG shareholders. The Southern Union board and I strongly believe that ETE is the right partner for Southern Union and that the combination of our companies is in the best interests of our investors, customers and employees."

ETE has received signed support agreements from shareholders representing 14% of SUG's total shares outstanding, who will pre-elect to receive ETE common units as their consideration, subject to the same proration as all other shareholders.

George L. Lindemann, Chairman and CEO of SUG, said, "We are pleased to be able to deliver superior value to our shareholders, with greater certainty to close, through this transaction with ETE. This deal creates strategic benefits that could not be achieved through any other industry combination. Our businesses are highly complementary and the combination will provide a broader range of services and market access that our existing and future customers demand."

Eric D. Herschmann, Vice Chairman, President and COO of SUG, added, "Our combination with ETE is the best path forward for this company and our shareholders, who will be able to elect, subject to the proration provision, to exchange their SUG shares for a guaranteed cash payment at closing or opt to participate in the potential upside of the combined companies through long-term equity ownership in ETE."

Prior to receipt of ETE's revised offer, Messrs. Lindemann and Herschmann informed ETE management and a Special Committee of SUG directors that, given their significant combined shareholdings of SUG, they had voluntarily determined to terminate their consulting and non-compete agreements with ETE included in the original merger agreement entered into on June 15, 2011. ETE has accepted the voluntary termination of those agreements.

In a sign of its commitment and confidence that it can complete this transaction in or before the first quarter of 2012, ETE has agreed to divest businesses, to the extent required by regulators, to ensure federal anti-trust approvals for the proposed ETE / SUG transaction will not delay or prohibit the closing. ETE has already begun the approval process with its HSR and Missouri regulatory filings.

In connection with the revised merger agreement, ETE also announced a binding agreement for the drop down of Southern Union Company's 50% interest in Citrus Corp., which owns 100% of the Florida Gas Transmission pipeline system, to Energy Transfer Partners, a publicly traded partnership, for $1.9 billion in cash. The drop down of this interest in Citrus Corp. is subject to the closing of ETE's acquisition of SUG and is not subject to any financing condition on the part of ETP or ETP unitholder approval.

"The drop down of Citrus to ETP allows ETE to deleverage its balance sheet upon closing and provides ETP with an interest in one of the best pipeline systems in the United States," said Mr. Warren.

Credit Suisse Securities (USA) LLC acted as exclusive financial advisor to ETE, with Latham & Watkins LLP, Bingham McCutchen LLP and Potter Anderson having acted as legal counsel. Evercore Partners and Goldman Sachs Group Inc are serving as financial advisors to the Special Committee of the board of directors of SUG. Sullivan & Cromwell LLP and Morris Nichols Arhst and Tunnell LLP are serving as legal advisors to the Special Committee. Locke Lord Bissell & Liddell LLP and Roberts & Holland LLP are serving as legal counsel to SUG.

* Energy Transfer Raises Its Offering Price for Southern Union to $8.9 Billion


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Energy Transfer Raises Its Offering Price for Southern Union to $8.9 Billion

- Energy Transfer Raises Its Offering Price for Southern Union to $8.9 Billion



Jul 5, 2011

Energy Transfer Equity, L.P. (NYSE:ETE) raised its offering price for Southern Union Company (NYSE:SUG) today to $8.9 billion, including $5.1 billion in cash and ETE common units.

Under the deal, unanimously approved by the board of directors for Southern Union, shareholders of SUG can elect to exchange their common shares for $40.00 in cash or 0.903 ETE common units.

The new offer is significantly higher than the company's original $33 per share, $7.9 billion offer it made on June 16, and trumps the $8.7 billion cash bid made by Williams Co (NYSE:WMB) on June 24.

Kelcy Warren, ETE's Chairman of the Board said, "We have listened to SUG shareholders and are providing a superior yet simpler transaction, including a significant cash component and the opportunity to benefit from ETE's upside through the ownership of ETE common units. The revised ETE / Southern Union agreement delivers superior value, highly compelling equity participation and certainty to close for SUG shareholders. The Southern Union board and I strongly believe that ETE is the right partner for Southern Union and that the combination of our companies is in the best interests of our investors, customers and employees."

Energy Transfer Equity has a potential upside of 14.5% based on a current price of $44.68 and an average consensus analyst price target of $51.17.

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Southern Union Sharing Information With Williams in Defiance of Energy Transfer

- Southern Union Sharing Information With Williams in Defiance of Energy Transfer



Jun 28, 2011

Southern Union Co (NYSE:SUG) has begun the process of providing takeover suitor Williams Cos. (NYSE:WMB) with confidential business information, according to a filing today with the SEC.

That's despite a warning from the company's original acquisition partner Energy Transfer Equity (NYSE:ETE) that doing so would be in violation of their signed agreement.

Williams offered $4.9 billion, all in cash, for Southern Union last week.

While Energy Transfer maintains that its $4.2 billion offer is still superior due to its deferred tax structure, things aren't looking good for the company.

Shares of The Williams Cos are trading up 2.33% at $29.47.

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Energy Transfer Tells Southern Union It Cannot Hold Talks With Williams

- Energy Transfer Tells Southern Union It Cannot Hold Talks With Williams



Jun 27, 2011

Energy Transfer Equity (NYSE:ETE) said in a letter to Southern Union Co (NYSE:SUG) that it cannot hold deal talks with Williams Companies (NYSE:WMB).

In the letter to Southern Union, Energy Transfer wrote that company's board "is not permitted by the merger agreement to engage in any discussions or negotiations with Williams." It also stated that Southern Union cannot provide nonpublic information to Williams.

The filing also said that Energy Transfer, "does not believe that the board can conclude, in good faith, that the Williams proposal constitutes, or is reasonably likely to result in, a superior offer."

It was also disclosed in a letter from Southern Union that Williams had bid $30 per share for the company in January, an offer that was inferior to one Southern had already received at the time from another, unnamed company.

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Energy Transfer to Buy Southern Union for $4.2B

- Energy Transfer to Buy Southern Union for $4.2B

Thursday, June 16, 2011
Dow Jones Newswires
HOUSTON
by Ben Lefebvre

Energy Transfer Equity (ETE) agreed to buy Southern Union (SUG) for $4.2 billion in a deal that will create the largest natural gas pipeline company in the U.S.

The two companies hope that combining Energy Transfer's position in prolific natural gas production areas with Southern's access to markets will make them better able to transport natural gas through what is becoming an increasingly congested system. The glut has been brought about by new drilling technology, which in the past decade has unlocked an unprecedented natural gas bounty from shale formations across the U.S.

"Energy Transfer has great interstate pipelines and access to key shale plays, but not as much market access as Southern brings to the Midwest and Florida," said Avi Feinberg, an equities analyst with Morningstar Inc.

The combined company will have capacity to move more than 30 billion cubic feet a day of natural gas along nearly 45,000 miles of pipeline. That's nearly half of the natural gas produced in the U.S.

As part of the deal, Energy Transfer Equity will assume $3.7 billion of Southern Union's debt. The new, larger company will have the heft to invest in adding new pipeline capacity, executives said.

The "mind-boggling" levels of natural gas liquids production coming out of the Permian Basin and Eagle Ford Shale areas of Texas has already tied up pipeline systems in the region, Energy Transfer Chief Executive Kelcy Warren said during a conference call with investors.

"I personally see a train wreck if someone doesn't build takeaway capacity in that region very soon," Warren said. "We're committed to doing that."

Energy Transfer plans an additional $1.7 billion in expansion projects, Warren said. After completion of the merger with Southern--expected in the first quarter of 2012--the new company will have access to more shale production areas than any other U.S. pipeline company, Warren said.

Natural gas is trading far below its prices in mid-2008 when the financial crisis crippled industrial demand even as unconventional gas flowed in great quantities from new shale production. Though the price of the commodity is expected to remain low for the foreseeable future, demand is expected to rise significantly. Oil giants, including ExxonMobil and Chevron, have made huge bets on the sector over the past year through acquisitions.

Energy Transfer said it has identified about $100 million in commercial and operational synergies as well as an additional $25 million in one-time savings.

Under the deal, Energy Transfer will issue new Series B units with an implied value of $33 a Southern Union share, a 17% premium to the former's Wednesday closing price.

Southern Union shares surged 17% to $33.11 in early trading. They last traded above the offer price in the middle of 2007, though they have risen 17% so far this year.

Energy Transfer shares rose 6%, to $45.09. The company reported in February its fourth-quarter earnings fell 13% on a surprise drop in revenue because of weakness in its natural-gas operations.

Southern Union reported last month its first-quarter earnings rose 7.4%, beating analysts' estimates, as increased revenue from distribution and the transportation and storage segments helped offset lower margins.

Copyright (c) 2011 Dow Jones & Company, Inc.

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French, US, Canadian Oil Ventures in Libya

French, US, Canadian Oil Ventures in Libya

Thursday, April 14, 2011
Deutsche Presse-Agentur (dpa)

Three Libyan oil ventures involving French, US and Canadian companies had their assets frozen by the European Union on Thursday, as it issued a fresh round of sanctions in a bid to increase pressure on the regime of Moammer Gaddafi.

Sanctions against a total of 11 Libyan energy firms came into force Thursday.

The three joint ventures are between Libya's National Oil Corporation and France-based Total, and the US-based Occidental Petroleum Corporation and Petro Canada.

The other companies targeted by the sanctions are all subsidiaries of the National Oil Corporation.

These sanctions add to the 16 energy companies already placed under sanctions, implementing a "de facto oil and gas embargo," said German Foreign Minister Guido Westerwelle on Tuesday while announcing the extra sanctions.

The EU also froze the assets of 15 other Libyan companies, including banks, investment firms and Libyan Arab Airlines, which is owned by the Libyan government.

Libya's ambassador to Chad and the governor of Libya's southern Ghat district were also hit with travel bans and asset freezes for recruiting mercenaries to support Gaddafi's regime.

Some two dozen people, including Gaddafi, his relatives and close associates, had earlier been targeted by EU sanctions.

One, however, had his travel ban and asset freeze lifted on Thursday, former foreign minister Musa Kusa, who had been defected on March 30, in Britain.