GE to fund Union Gas drilling in Texas

STAMFORD, Conn., April 2 (UPI) -- U.S. company GE Energy Financial Services will invest in Union Gas' drilling for oil and gas in Texas.

GE announced it will put $104 million into a joint venture with Houston-based Union Gas. GE will hold a 90-percent stake in the partnership while UG will hold 10 percent, providing $11 million.

The two will work together to develop oil and natural gas projects in Victoria, Goliad and DeWitt counties in Texas. The partnership is expected to invest another $29 million to develop projects over the next two years.

The deal allows UG the funding it needs to expand its drilling programs without having to sell reserves or take on more debt, said Randy Lowry, president of UG, and over time the firm may be able to acquire back from GE the majority of the partnership interest.

GE Energy Financial has about $2.75 billion invested in similar projects with independent oil and gas producers around the country, said John Schaeffer, a managing director with the group.