Sun, May 23, 2004 - Page 11 News List

Maverick Texas oilman set to buy Enron's gas assets

BANKRUPTCY Oscar Wyatt -- known for his dealings with Saddam and Gadhafi, is leading an investment in Enron's natural gas pipelines

NY TIMES NEWS SERVICE , HOUSTON, TEXAS

Oscar Wyatt, the Texas oilman known for his dealings with Moammar Gadhafi and Saddam Hussein, is back in the energy business. Wyatt and a group of investors agreed to buy Enron's natural gas pipelines in North America for US$2.2 billion, Enron's acting chief executive said on Friday.

Wyatt, 79, is part of a group called NuCoastal -- which includes Citigroup, ArcLight Capital Partners and Kelso & Co -- that is paying US$1.77 billion and assuming US$430 million of debt in the transaction, which is part of Enron's plan to emerge from bankruptcy protection.

Enron, which has been mired in bankruptcy court since December 2001, said the deal was approved by its chief creditors but was still awaiting the approval of the bankruptcy court in a process that allows other potential buyers to submit superior bids.

Stephen Cooper, acting chief executive of Enron, said the transaction "provides the best value for our creditors and reflects a stronger market for quality, high-performing energy assets than we had seen two years ago."

The deal would give Wyatt and his partners control over CrossCountry Energy, an Enron operation with 1,100 employees and 9,900 miles of pipelines, including systems in Arizona, Florida, New Mexico, Oklahoma and West Texas. It is Wyatt's first significant foray into the energy industry since selling his oil company, the Coastal Corp, for more than US$20 billion to the El Paso Corp in 2001.

Since then, Wyatt gained notoriety by teaming with another large El Paso shareholder, Selim Zilkha, in a proxy battle last year to oust El Paso's board after the company's shares languished in the wake of an ill-fated effort at mimicking Enron in the energy-trading business. El Paso's board and executive suite survived the proxy dispute.

The agreement to buy CrossCountry once again rubs Wyatt against El Paso. A CrossCountry unit owns half of the Citrus Corp, a 8,000km pipeline stretching from South Texas to Florida, with an El Paso unit controlling the other half.

A spokeswoman for Wyatt declined to comment on his plans for CrossCountry.

Wyatt, who was once called "meaner than a junkyard dog" in article by Texas Monthly magazine, and a partner started the Hardly Able Oil Company in 1951 using the proceeds from an US$800 loan on Wyatt's car, a 1949 Ford. He eventually expanded his operations, which provided South Texas cities with natural gas, into a conglomerate with extensive dealings in the Middle East and elsewhere.

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