HOUSTON, Oct. 10 (UPI) — Calpine Corp., the largest U.S. company deriving electricity from natural gas, said it could fill its retail base with non-core assets from Noble Group.
Calpine said Monday it agreed to pay a combined $1 billion to grab the North American energy distribution unit of Noble Group, a Singapore-listed commodities trader with key holdings in the global energy market.
Thad Hill, Calpine’s president and CEO, said his company grabbed hold of one of the best direct energy sales platforms in the United States with the acquisition of Noble Americas Energy Solutions.
“In addition to expanding our retail customer sales channels and product offerings, we will more than double the volume of retail load we are capable of serving across the country from our complementary wholesale power generation fleet,” he said in a statement.
Noble moved on the holdings in question through a $315 million agreement with Sempra Energy Solutions in 2010 in an agreement that included commercial and industrial customers in 16 states. Noble Americas Energy Solutions now serves customers in 18 states nationwide
Sempra, alongside the Royal Bank of Scotland, at the time were looking to sell off the last bits of a joint venture in the North American wholesale power and natural gas business.
The parent Noble, which holds an interest in a complex of natural gas fields off the coast of Israel — including the giant Leviathan field — said the sale of its non-core assets to Calpine supports its efforts to raise $2 billion in capital to help balance the books.
“With this divestiture, Noble will continue to reduce debt while also funding growth opportunities in our high return businesses,” CEOs Jeff Frase and Will Randall said in a statement.
Noble sold off more than 33,000 undeveloped acres in the Denver-Julesburg basin in Colorado to Synergy Resources for $505 million, which when combined with other sales this year, brought the total proceeds to more than $775 million.
In February, as the price for crude oil hovered around $30 per barrel, the company set a 2016 spending target of about $1.5 billion, which was 50 percent lower than outlined for last year
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