The US utility owner said that it would fund the stock buyback with a series of transactions, including the restructuring of its joint venture with ConocoPhillips.
Charlotte, North Carolina-based Duke will reduce its stake in Duke Energy Field Services LLC, a lucrative field services business controlled with ConocoPhillips, from 69.7% to 50%. By becoming equal partners, Duke said that it would receive approximately $1.1 billion in cash and assets from ConocoPhillips.
Duke Energy and ConocoPhillips stated that they had discussed moving to a 50-50 structure for some time. To support continued growth, Duke Energy Field Services is considering forming a new master limited partnership.
In addition, Duke’s board of directors agreed to the $1.1 billion sale of Texas Eastern Products Pipeline Company to EPCO Inc.
Consistent with our portfolio management strategy, we are taking steps in this strong commodity price environment to monetize some of our assets – reducing risk and generating cash, commented Paul Anderson, Duke Energy chairman of the board and CEO. These moves create shareholder value and less cyclical earnings while leaving us the flexibility to pursue other growth opportunities as they arise.
