UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________________________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of earliest event reported February 28, 1997
THE MONTANA POWER COMPANY
(Exact name of registrant as specified in its charter)
Montana 1-4566 81-0170530
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
40 East Broadway, Butte, Montana 59701
(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code (406) 723-5421
ITEM 2. Acquisition or Disposition of Assets
NORTH AMERICAN PURCHASES VESSELS ENERGY'S D-J PROPERTIES
On February 28, 1997, Montana Power Co. announced the largest acquisition
in its history, saying it had entered into an agreement to purchase Vessels
Energy's oil and gas assets in Colorado's Denver-Julesburg (D-J) Basin.
The $85-million acquisition will be made through North American Resources
Co., Montana Power's U.S. oil and gas subsidiary, and will be financed
internally.
"This acquisition makes a great strategic fit with North American's
existing facilities in the D-J Basin, and nearly doubles the size of our
operations just north of Denver," said Jim Benner, vice president of North
American Resources Company, based in Montana Power's Butte headquarters. North
American has been active in the D-J Basin since 1989.
"Buying these Vessels' assets paves the way for Montana Power to supply
natural gas and related energy products and services to the rapidly growing
Denver-Front Range region well into the future," said Dick Cromer, executive
vice president of Montana Power's Energy Supply Division, which includes North
American Resources.
The division consists of companies involved in owning and operating
independent electric generation; producing and marketing energy commodities,
including electricity, oil, natural gas and coal; and furnishing solutions to
customers' energy management needs, such as acquiring low-cost energy supplies,
providing resource accounting services, and improving energy-use efficiency
with innovative energy management strategies.
With this acquisition from Denver-based Vessels, North American's annual
hydrocarbon production in the D-J Basin will increase from 3,805 million cubic
feet (MMCF) of natural gas to 7,275 MMCF, from 146,000 barrels of oil to
296,000 barrels, and from 233,000 barrels of natural gas liquids to 1,613,000
barrels. North American will own more than 565 wells, operating some 470 of
them, and also will own and operate an 800-mile gas-gathering system.
For 1996, Montana Power's Energy Supply domestic and foreign oil and gas
operations produced 15,900 MMCF of natural gas, 1,220,000 barrels of oil, and
500,000 barrels of natural gas liquids. North American's share of that was
8,900 MMCF of gas, 540,000 barrels of oil, and 233,000 barrels of liquids.
Consolidated operation of North American's and Vessels' gas production
and processing facilities will increase the scope of North American's
operations and add value to its business. Vessels' Wattenberg gas processing
and fractionation plant is approximately 12 miles from North American's Fort
Lupton gas-processing facility. Combining and upgrading these two facilities
will create a larger, more efficient operation -- increasing the BTU value of
North American's natural gas; producing high quality propane, butane, ethane
and natural gasoline; and providing North American entry into the natural gas
liquids business.
"By using two existing natural gas transmission pipelines, North American
has the ability to control gas resources from the wellhead to the point of
delivery in the region," Cromer said. "Additionally, expanding our gas and gas
liquids marketing activities should provide opportunities to expand the market
for other Montana Power energy and telecommunications products and services."
Montana Power through its telecommunications subsidiary, Touch America,
has just completed a $62-million fiber optic network linking Denver,
Minneapolis, Seattle and Canada. Touch America provides dedicated voice, data
and video transmission; long distance service; Internet access, and specially
designed business telephone systems and products.
SIGNATURES
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 MONTANA POWER COMPANY
(Registrant)
By:/s/ D. S. Smith
D. S. Smith
Controller
Date: March 4, 1997
- -4-
