Loews in deal for Dominion gas assets
NEW YORK (Reuters) - Loews Corp. LTR.N, a conglomerate, said on Monday it agreed to buy natural gas exploration and production assets in three states from Dominion Resources Inc. (D.N) for $4.025 billion in cash to diversify its revenue stream.
The main properties being acquired are located in the Black Warrior Basin in Alabama, the Antrim Shale in Michigan and the Permian Basin in Texas, with estimated proved reserves of about 2.5 trillion cubic feet equivalent. New York-based Loews expects a third-quarter closing.
"These long-lived and low-risk natural gas-producing assets represent an excellent platform for Loews to enter the exploration and production business," Loews Chief Executive James Tisch said in a statement.
The acquisition is part of a transaction in which Richmond, Virginia-based Dominion will also sell several U.S. natural gas and oil exploration operations to XTO Energy Inc. XTO.N for $2.5 billion.
Tisch, whose billionaire family runs the conglomerate, has said he has been looking for ways to spend about $5.5 billion. In an April 30 conference call, Tisch had set a goal to "continue diversifying (the) very significant cash flow that is coming up to the parent."
Timothy Parker, a Dominion senior vice president of exploration and production, will oversee the assets that Loews is buying, Loews said.
Loews' businesses include financial, tobacco, energy, hotel and watch-making companies. It said it owns 89 percent of business insurer CNA Financial Corp. (CNA.N), all of tobacco company Lorillard Inc., 75 percent of Boardwalk Pipeline Partners LP (BWP.N), 51 percent of Diamond Offshore Drilling Inc. (DO.N), and all of Loews Hotels and watchmaker Bulova Corp. CNA generates more than half of overall revenue.
Loews shares closed Friday at $51.02 on the New York Stock Exchange. They began the year at $41.47.