Calpine prices Canadian trust units

Gary Park

Petroleum News Calgary correspondent

United States power giant Calpine is counting on gross proceeds of $184.5 million from the initial public offering to create an income trust to operate its natural gas and crude oil properties in Alberta.

CNG Trust will issue about 18.4 million trust units at $10 each from an offering expected to close Oct. 15. The first of the monthly cash distributions is scheduled for mid-December at 15 cents a month for each unit.

CNG will acquire from Calpine fields in the Markerville, Sylvan Lake and Innisfail areas of central Alberta that had average production for the first half of 2003 of 28 million cubic feet per day of gas equivalent from proven reserves of 83 billion cubic feet of gas equivalent.

San Jose, Calif.-based Calpine will initially hold 25 percent of CNG’s outstanding trust units and through that will participate in the trust’s business strategy.

It will have an option to purchase up to 100 percent of CNG’s production for use in its North American power generation facilities.