Washington Gas to Invest $126 Million in Natural Gas Reserves Utilizing New Virginia Law
Washington Gas, a subsidiary of WGL Holdings, Inc. (NYSE:WGL), has
signed a conditional purchase and sale agreement with Energy Corporation
of America (ECA) to acquire natural gas reserves through working
interests in producing natural gas wells in Pennsylvania's Appalachian
Basin. The investment of approximately $126 million in physical natural
gas reserves enables Washington Gas to secure a long-term supply of
natural gas that is expected to generate substantial savings for
Virginia customers over the 20-year investment period.
"Washington Gas is pleased to announce this important partnership with
ECA," said WGL and Washington Gas Chairman and Chief Executive Officer,
Terry D. McCallister. "This opportunity to invest directly in low-cost
natural gas supplies will help to reduce gas price volatility impacts
and provide expected savings to our Virginia customers."
The purchase of the reserves is conditional upon approval by the
Virginia State Corporation Commission. Washington Gas expects to file
its proposal with the Commission within a week. The agreement with ECA
is the first announced transaction to be filed under a 2014 Virginia law
that allows natural gas utilities to recover investments in strategic
natural gas facilities that provide cost savings, reduce price
volatility or reduce supply risk to utility customers.
The acquired assets include 22 producing wells in Greene County,
Pennsylvania, and three producing wells in Clearfield County,
Pennsylvania, all of which will be operated by ECA.
"From our perspective, ECA's more than 50 years of production experience
in the Appalachian Basin combined with Washington Gas' long history of
reliable delivery of natural gas will serve for a great partnership,"
said ECA Chief Executive Officer John Mork.
ECA is one of the premier operators in the region and currently operates
more than 4,600 wells throughout Appalachia.
KeyBanc Capital Markets acted as exclusive financial advisor to
WGL (NYSE-WGL), headquartered in Washington, D.C., is a leading source
for clean, efficient and diverse energy solutions. With activities and
assets across the U.S., WGL consists of Washington Gas, WGL Energy, WGL
Midstream and Hampshire Gas. WGL Energy delivers a full ecosystem of
energy offerings including natural gas, electricity, green power, carbon
reduction, distributed generation and energy efficiency provided by WGL
Energy Services, Inc. (formerly Washington Gas Energy Services, Inc.),
WGL Energy Systems, Inc. (formerly Washington Gas Energy Systems, Inc.)
and WGSW, Inc. WGL provides options for natural gas, electricity, green
power and energy services, including generation, storage,
transportation, distribution, supply and efficiency. Our calling as a
company is to make energy surprisingly easy for our employees, our
community and all our customers. Whether you are a homeowner or renter,
small business or multinational corporation, state and local or federal
agency, WGL is here to provide Energy Answers. Ask Us. For more
information, visit us at www.wgl.com.
Founded in 1963, Energy Corporation of America (ECA) is a privately held
company that actively pursues the exploration, extraction, production,
and transportation of natural gas and oil, both in the United States and
around the world. ECA owns and operates approximately 4,600 wells, 5,000
miles of pipeline, and a million acres in North America alone. Since its
inception, ECA has been deeply committed to its employees and their
families. Through the use of profit sharing, a stock ownership program,
an education program, and its award-winning wellness program, ECA
facilitates the development of its employees in all areas.
This press release includes forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995 with
respect to the cost of the purchased gas supplies relative to market
prices, the amount of volatility of gas supply prices and savings to
customers, the level of output of the wells during the investment
period, the timing of our filing of our proposal with the Virginia State
Corporation Commission, and other future expectations. Forward-looking
statements are typically identified by words such as, but not limited
to, "estimates," "expects," "anticipates," "intends," "believes,"
"plans," "forecasts," and similar expressions, or future or conditional
verbs such as "will," "should," "would," and "could." Although we
believe such forward-looking statements are based on reasonable
assumptions, we cannot give assurance that every objective will be
achieved. Forward-looking statements speak only as of today, and we
assume no duty to update them. Factors that could cause actual
results to differ materially from those expressed or implied include,
but are not limited to, the production of the wells in which we
purchased a working interest, natural gas price levels and volatility,
the effectiveness of ECA in operating the wells, counterparty risks, the
timing of our filing of our proposal with the Virginia State Corporation
Commission, whether the Virginia Corporation Commission approves our
proposal, general economic conditions and the factors discussed under
the "Risk Factors" heading in our most recent annual report on Form 10-K
and other documents filed with or furnished to the Securities and
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WGL Holdings, Inc.
Source: WGL Holdings, Inc.
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