SAN DIEGO, Aug. 1, 2006 – Sempra Generation, a unit of Sempra Energy (NYSE: SRE), has finalized the sale of its exploration and production subsidiary, Sempra Energy Production Company (SEPCO), to PEC Minerals L.P. for approximately $225 million in cash. Sempra Energy expects to record an after-tax gain of approximately $110 million from the sale in the third quarter 2006 as part of discontinued operations.
PEC Minerals L.P. is owned by a group consisting of Jetta Operating Company, Trevor Rees-Jones and Providence Energy Corp.
SEPCO’s assets include ownership of mineral rights over 570,000 net acres and executive rights to more than 190,000 net acres in 31 states.
The cash proceeds from the sale will be used to help fund Sempra Energy’s other capital projects, such as liquefied natural gas receipt terminals, new interstate natural gas transmission pipelines and natural gas storage facilities.
In 1998, SEPCO’s parent company, Pacific Enterprises, merged with Enova Corporation to form Sempra Energy. Since the merger, SEPCO has been operating as a subsidiary of Sempra Generation. SEPCO’s offices are in Dallas.
Petrie Parkman & Co., a private energy investment-banking firm, acted as financial advisor to Sempra Energy in this transaction.
Sempra Generation is the Sempra Energy subsidiary that operates and maintains power plants for the competitive market. Sempra Energy, based in San Diego, is a Fortune 500 energy services holding company with 2005 revenues of $11.7 billion. The Sempra Energy companies’ 14,000 employees serve more than 29 million consumers in the United States, Europe, Canada, Mexico, South America and Asia.
This press release contains statements that are not historical fact and constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. When the company uses words like “believes,” “expects,” “anticipates,” “intends,” “plans,” “estimates,” “may,” “would,” “should” or similar expressions, or when the company discusses its strategy or plans, the company is making forward-looking statements. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions. Future results may differ materially from those expressed in the forward-looking statements. Forward-looking statements are necessarily based upon various assumptions involving judgments with respect to the future and other risks, including, among others: local, regional, national and international economic, competitive, political, legislative and regulatory conditions and developments; actions by the California Public Utilities Commission, the California State Legislature, the California Department of Water Resources, the Federal Energy Regulatory Commission and other regulatory bodies in the United States and other countries; capital markets conditions, inflation rates, interest rates and exchange rates; energy and trading markets, including the timing and extent of changes in commodity prices; the availability of natural gas; weather conditions and conservation efforts; war and terrorist attacks; business, regulatory, environmental, and legal decisions and requirements; the status of deregulation of retail natural gas and electricity delivery; the timing and success of business development efforts; the resolution of litigation; and other uncertainties, all of which are difficult to predict and many of which are beyond the control of the company. These risks and uncertainties are further discussed in the company’s reports filed with the Securities and Exchange Commission that are available through the EDGAR system without charge at its Web site, www.sec.gov and on the company’s Web site, www.sempra.com.
Sempra Generation is not the same company as the utilities, SDG&E or SoCalGas, and is not regulated by the California Public Utilities Commission.