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Dynegy sells gas assets in Canada

Houston, Oct. 19 (Reuters): Troubled energy merchant Dynegy Inc. on Friday said it will sell a chunk of its Canadian natural gas business to crude oil and gas marketer The Seminole Group Inc. Houston-based Dynegy will sell its Canadian natural gas marketing business, which serves 600 industrial and commercial customers in Canada, to Seminole.

Dynegy is also selling its 50 per cent stake in Tidal Energy Marketing Inc., a wholesale crude oil marketing company, to Seminole, a privately held concern based in Tulsa, Oklahoma.

Dynegy spokesman John Sousa declined to say how much Seminole paid. A source familiar with the deal said the sale price was less than $ 50 million.The deal is expected to close in November, subject to regulatory approval.

The sale is part of Dynegy’s exit from the marketing and trading business, which the firm announced Wednesday. The exit from marketing and trading, which was once its bailiwick, is part of a broad restructuring effort the firm announced to help it survive.

Dynegy has seen its stock slide into penny territory as its credit was junked amid investor concern over its financial health. The failure of Enron Corp., which Dynegy once planned to rescue from bankruptcy, ultimately dragged the energy merchant sector down as investors lost confidence in its profitability.

Dynegy is also under federal investigation for allegedly improper trades, along with several other companies.

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