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FORM 8-K
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
CURRENT REPORT
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Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (date of earliest event Reported) June 5, 1997
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THE COLUMBIA GAS SYSTEM, INC.
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(Exact name of registrant as specified in its charter)
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<S> <C> <C>
Delaware 1-1098 13--1594808
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(State of other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
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12355 Sunrise Valley Drive, Suite 300, Reston, VA 20191-3420
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(Address of principal executive offices)
Registrant's telephone number, including area code (703) 295-0300
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Item 5. Other Events
Information contained in a News Release dated June 3, 1997, is
incorporated herein by reference.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
The Columbia Gas System, Inc.
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(Registrant)
By /s/J. W. Grossman
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Vice President &
Controller
Date: June 5, 1997
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CONTACTS:
For Immediate Release John H. Jennrich: (703) 295-0423
June 3, 1997 Colleen Tatano: (412) 873-1300
COLUMBIA'S GAS-MARKETING COMPANY EXPANDS
WITH DEAL TO PURCHASE PENNUNION ENERGY SERVICES
RESTON, Va., June 3 -- The Columbia Gas System today announced that a
wholly owned natural gas-marketing subsidiary, Columbia Energy Services Corp.
(CES), is purchasing PennUnion Energy Services LLC, an energy-marketing
subsidiary of Pennzoil Co., for $14.75 million. That price is subject to
working capital adjustments.
The acquisition of PennUnion, of Houston, is expected to permit CES to
greatly expand its wholesale market presence. The acquisition is expected to
close by June 30.
CES, of Pittsburgh, markets an average of 1.5 billion cubic feet per
day (Bcfd) of natural gas. In the first quarter of 1997, PennUnion moved an
average of 2.1 Bcfd. After consolidation, the combined companies should market
more than 3 Bcfd.
"Growth is a major emphasis for CES, and the PennUnion acquisition is
an important step in our new energy-marketing initiative," said Oliver G.
Richard III, chairman, CEO and president of Columbia Gas System. "PennUnion
brings us both an established wholesale energy base to support marketing
efforts beyond our historical reach, and a retail marketing approach focused on
operating on non-Columbia distribution systems. As a result, PennUnion's
strategy complements that of CES in that it is focused on geographic areas
(primarily in the Northeast) contiguous to Columbia's service territory."
A significant portion of the PennUnion marketing volumes is
represented by a contract to purchase most of Pennzoil's U.S. natural gas
production. CES will market those volumes under a new contract with Pennzoil's
exploration and production unit. Pennzoil currently produces
-more-
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approximately 585 million cubic feet per day (MMcfd) of natural gas in the
United States, according to Pennzoil. Its total North American gas production
is 610 MMcfd.
With this transaction, Richard noted, Pennzoil will become CES's
largest single supplier. "We think that taking Pennzoil on as a major supplier
is great for CES," Richard said. "As with the Kerr-McGee deal a month ago,
which saw CES undertake the marketing of all of Kerr-McGee's 250 MMcfd of gas
production, we see our job as linking up high-quality energy suppliers with our
growing network of retail customers."
The Columbia Gas System, a Fortune 500 and S&P 500 company located in
Reston, Va., is one of the nation's largest natural gas systems, with assets of
about $6 billion. Its operating companies are engaged in all phases of the gas
business plus marketing, fuel management services and electric power
generation. Columbia companies, directly or indirectly, serve more than 7
million natural gas customers -- 12 percent of the nation's total -- in 15
states and the District of Columbia.
Information about the Columbia Gas System is available on the World
Wide Web at http://www.columbiaenergy.com. Columbia stock trades on the New
York Stock Exchange under the symbol CG.
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Financial Community Contacts: Tom Hughes -- (703) 295-0429
Melissa Bockelmann -- (703) 295-0427
