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In Play Today: Dominion looks to sell noncore assets; oil, gas M&A accelerates

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In Play Today: Dominion looks to sell noncore assets; oil, gas M&A accelerates

S&P Global Market Intelligence presents In Play Today, a periodic summary of potential deal activity in the energy sector. This summary is based on information obtained by S&P Global Market Intelligence and may not be inclusive of all potential deal activity. Send comments and news leads to Darren.Sweeney@spglobal.com.

Power

South Carolina continues to explore the sale of state-owned utility Santee Cooper, known legally as South Carolina Public Service Authority, following the abandonment of the more than $9 billion V.C. Summer nuclear expansion project. Florida investor-owned utility NextEra Energy Inc. is reportedly interested in acquiring Santee Cooper with unofficial terms that include eliminating $8 billion in debt and providing $200 million in customer refunds. Dominion Energy Inc., Southern Co. and Duke Energy Corp. have been mentioned as other potential suitors. NextEra and Southern, however, announced a deal May 21 for NextEra to acquire Southern's Florida utilities and two gas plants.

AES Corp. executives said May 8 that the company will continue to explore asset sales, including its interest in a Brazilian distribution utility, as part of its debt reduction and business restructuring plan. "Our priority, quite frankly, has been to sell merchant and especially coal assets," AES President and CEO Andrés Gluski told analysts and investors.

SunPower Corp. said May 8 it plans to sell its remaining solar development pipeline as the California company narrows its focus on solar panel manufacturing and distributed generation. The move aligns with SunPower's proposed purchase of Oregon-based solar panel manufacturer SolarWorld Americas Inc.

City and utility officials in Jacksonville, Fla., on Feb. 21 officially launched a formal process to evaluate the sale of municipally owned power company JEA. The evaluation, however, may already be over after the utility's board of directors unanimously decided May 15 to table any activity tied to possible privatization.

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Natural gas

Wall Street analysts believe the proposed $23.3 billion combination of U.S. refiners Marathon Petroleum Corp. and Andeavor set their master limited partnerships on a collision course. MPLX LP executives, however, declined to address speculation of a merger with Andeavor Logistics LP on an April 30 conference call.

Boardwalk Pipeline Partners LP parent Loews Corp. is "seriously considering" a buyout of its MLP's outstanding units, Boardwalk GP LLC CEO Stanley Horton said on an April 30 earnings call.

Reports surfaced April 3 that Calgary, Alberta-headquartered Enbridge Inc. is looking to divest a group of Canadian gathering and processing assets, once owned by Spectra Energy Corp. The assets, located across British Columbia and Alberta, reportedly could sell for more than C$2 billion. Enbridge announced in November 2017 that it plans to monetize C$10 billion in noncore assets, with at least C$3 billion to be divested or monetized in 2018.

Dominion Energy announced March 27 it will pursue the sale of noncore assets, which could include its 50% stake in Blue Racer Midstream LLC, in order to reduce parent-level debt and boost the company's near-term credit profile. Executives in April said they are evaluating $1 billion to $1.5 billion in asset sales as Dominion Energy Midstream Partners LP continues to struggle following an unfavorable tax change enacted by the Federal Energy Regulatory Commission.

Oklahoma-based oil and gas producer Devon Energy Corp. revealed plans March 26 to market up to $5 billion of assets in an effort to simplify its portfolio.

SandRidge Energy Inc. on March 19 said it is starting a "formal process" to evaluate strategic options, including a sale or asset combination. The announcement came after the company's board of directors rejected a $564 million all-stock merger offer from rival exploration and production company Midstates Petroleum Co. Inc.

Range Resources Corp. executives said on a Feb. 28 earnings call that they are actively marketing assets in northeast Pennsylvania and the Midcontinent to pay down debt and offset "dislocation" in the shale driller's equity value.

Coal

Glencore PLC is reportedly thinking about bidding for the Optimum Collieries in South Africa that it previously sold to an investment group.

Anglo American PLC indicated in March that it is considering the acquisition of new projects as the markets for coal and other commodities improve.

Updates

Houston-based gas and electric utility CenterPoint Energy Inc. on April 23 said its plans to acquire Indiana gas and electric utility Vectren Corp. for $6 billion in cash. CenterPoint will also assume Vectren's debt, which is forecast to be about $2.5 billion. CenterPoint executives said the company does not intend to sell its stake in Enable Midstream Partners to fund the transaction.

8point3 Energy Partners LP on Feb. 5 said it agreed to be bought by asset manager Capital Dynamics Inc. in a deal that values the yieldco at about $1.7 billion. Rival solar companies and yieldco sponsors First Solar Inc. and SunPower said in April 2017 that they were separately considering selling their stakes in the joint venture focused on holding and operating solar power plants.

Coal producer Murray Energy Corp. on Jan. 24 announced an agreement to acquire a 51% ownership interest in a new company that will own certain Armstrong Energy Inc. assets, including five mines in the Illinois Basin. Under the deal, which closed in February, Murray Kentucky Energy Inc. shares ownership of West Kentucky Coal Resources LLC with certain Armstrong senior secured noteholders, which hold 49% of the assets.

Richmond, Va.-headquartered Dominion Energy on Jan. 3 announced its plan to acquire embattled South Carolina utility SCANA Corp. in a stock-for-stock deal valued at about $7.9 billion, or $14.6 billion including the assumption of debt.