2008-09-02-2008-04-01

Bought 90% WI in 2 fields in E. TX, Gulf Coast.

GE Energy Financial Services, a subsidiary of GE, Stamford, Conn., (NYSE: GE) plans to acquire a 90% interest in two fields in East Texas and the Texas Gulf Coast from Houston-based Union Gas Corp. and other investors for $104 million. The companies will own the assets through the partnership Union Gas Production Partners LP in which GE Energy will be limited partner and Union will be general partner and operator. Union will contribute 10%, or $11 million, for a total deal value of $115 million. The partnership plans to invest an additional $29 million to develop and produce proved reserves during the next two years. The properties are in Victoria, Goliad and DeWitt counties and are comprised of mostly gas and gas liquids. Union president Randy Lowery says, "Our new partnership combines the Union Gas team's exploration and operating experience with the know-how and financial strength of GE. Allying with a strong institutional partner allows us to accelerate the development of our reserves to grow our production and cash flow at reasonable costs." GE Energy managing director and head of the oil and gas unit John Schaeffer says, "This new investment demonstrates the unique value proposition of our monetization and development partnership, an excellent growth opportunity for Union and GE Energy Financial Services. Combining Union's expertise in the complete oil and gas development cycle and GE Energy Financial Services' industry knowledge and commitment should create strong operating results enhanced by attractive related drilling projects."