Plenty of bidders, including energy conglomerates and electric companies, will be lining up once Mitchell Energy & Development Corp. goes up for sale, predicts John E. Olson, senior vice president and natural gas analyst for Sanders Morris Mundy in Houston. "This situation is a happy one. The obvious suspects here will be the big energy conglomerates, the big electric companies and maybe some of the large independent producers. But the best fit would be with an energy conglomerate," he said. The Woodlands, Texas-based Mitchell Energy could sell for about $30 a share, Olson said, when the stock was trading for about $23 a share. Goldman, Sachs & Co. and Chase Securities Inc. are advising the company in the matter. "They have no lack of interested bidders. In my not-so-humble opinion, Mitchell Energy is going to be the single finest block of assets going on the market for all of 1999 or 2000," Olson said. He bases his assessment on energy market changes driven by the construction of gas-fired power plants. "Two or three power plants are going to be built literally in Mitchell's back yard in Wise and Jack counties up in the Fort Worth Basin. There is some method to that particular madness because that is where the gas is." Mitchell Energy has 1 trillion cu. ft. equivalent of proved gas reserves and another 500 billion cu. ft. of probable gas reserves as well as major unregulated gas gathering and marketing assets. "The other nice thing from the point of view of an energy conglomerate or big electric company is that the gas reserve base in the Fort Worth Basin continues to grow. They are now developing a lot of small wells with long reserve life, 75 to 100 years, and they keep on finding new wine in old bottles," Olson said. -Paula Dittrick

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