CHARLOTTE, N.C., Feb 24, 2005 /PRNewswire-FirstCall via COMTEX/ -- Duke Energy's board of directors has approved a plan to repurchase up to $2.5 billion in common stock periodically over the next three years, funded in part by a restructuring of the company's ownership interest in Duke Energy Field Services LLC (DEFS) with ConocoPhillips; the sale by DEFS of the general partner of TEPPCO Partners L.P. (TEPPCO) to EPCO Inc.'s subsidiary, Enterprise GP Holdings L.P. (EPCO); and the sale by the company of all of its limited partner units in TEPPCO to EPCO.

The board approved the execution of an agreement between Duke Energy and ConocoPhillips to reduce Duke Energy's ownership share of DEFS from 69.7 percent to 50 percent, resulting in a 50-50 joint venture between Duke Energy and ConocoPhillips. It also approved the sale by DEFS of the TEPPCO general partner to EPCO for $1.1 billion and the sale by Duke Energy of its 2.5 million limited partner units in TEPPCO to EPCO at Tuesday's closing price of $41.58 per share, for a total of approximately $100 million.

"Consistent with our portfolio management strategy, we are taking steps in this strong commodity price environment to monetize some of our assets - reducing risk and generating cash. These moves create shareholder value and less cyclical earnings while leaving us the flexibility to pursue other growth opportunities as they arise," said Paul Anderson, Duke Energy chairman of the board and chief executive officer.

Under the terms of the agreement with ConocoPhillips, Duke Energy and ConocoPhillips will become equal 50 percent partners in the business. Duke Energy will receive directly and indirectly through its ownership interest in DEFS approximately $1.1 billion in cash and assets from ConocoPhillips.

The transaction includes the transfer of DEFS' Canadian assets to Duke Energy Gas Transmission (DEGT). In addition, ConocoPhillips will transfer its interest in the Empress System into DEGT's operations in western Canada. The DEFS Canadian business consists of natural gas gathering and processing facilities in Alberta and British Columbia. The Empress System operations include natural gas liquids extraction and fractionation facilities in Alberta and related liquids transportation and storage operations. The addition of those assets will strengthen DEGT's position in western Canada with greater scale, scope and diversity and is reflected in the $1.1 billion of value.

Duke Energy and ConocoPhillips have discussed moving to a 50-50 structure for some time. "The time is now right for both parties," Anderson said. He noted that both parent companies are committed to maintaining DEFS' industry- leading performance as well as DEFS' strong financial position and investment- grade ratings. To support continued growth, DEFS is considering forming a new master limited partnership.

The sale of the TEPPCO general partner to EPCO occurred earlier today. The sale of Duke Energy's limited partner units in TEPPCO is expected to close on or before March 1, 2005. The DEFS restructuring transaction, which is subject to customary United States and Canadian regulatory approvals, is expected to close late in the second quarter or early in the third quarter of 2005.

Together, the transactions result in a one-time gain that will be recognized by the company at the closing of the transactions. Those gains are expected to be in the range of 80 cents to 90 cents per basic share.

The impact of the two transactions on future earnings per share will be virtually offset by the planned stock repurchase. The share repurchase will be funded with the proceeds associated with these transactions along with current cash balances and future cash generation. Duke Energy ended 2004 with $1.85 billion in cash, cash equivalents and short-term investments. The share repurchase program is expected to begin in 2005.

A conference call for analysts is scheduled for 10 a.m. ET today. The conference call can be accessed via the investors' section of Duke Energy's Web site http://www.duke-energy.com/investors/ or by dialing 877/502-9274 in the United States or 913/981-5584 outside the United States. The confirmation code is 8237049. Please call in five to 10 minutes prior to the scheduled start time. A replay of the conference call will be available by dialing 888/203-1112 with a confirmation code of 8237049. The international replay number is 719/457-0820, confirmation code 8237049. A replay and transcript also will be available by accessing the investors' section of the company's Web site. The presentation may include certain non-GAAP financial measures as defined under SEC rules. In such event, a reconciliation of those measures to the most directly comparable GAAP measures will be available on our investor relations Web site at: http://www.duke-energy.com/investors/publications/gaap/ .

Duke Energy Field Services (DEFS) is a premier North American midstream energy company that leads or is among the nation's leaders in the gathering, compression, treating and processing of natural gas; and fractionation, transportation, marketing and trading of NGLs. Other services include the transportation, marketing and storage of natural gas. DEFS operates in 16 states and two provinces across the five largest natural gas-producing regions in North America, extending from western Canada to the Gulf Coast. The Denver- based company owns or operates 66 plants and 59,000 miles of pipeline. Current handled volumes are 7.3 TBtu/d of natural gas and 363,000 Bbls/d of NGLs.

DEFS was formed by combining the Duke Energy and ConocoPhillips natural gas gathering and processing businesses. Duke Energy owns approximately 70 percent of the joint venture and ConocoPhillips owns about 30 percent. More information is available about the company at www.defs.com .

Duke Energy (NYSE: DUK) is a diversified energy company with a portfolio of natural gas and electric businesses, both regulated and unregulated, and an affiliated real estate company. Duke Energy supplies, delivers and processes energy for customers in the Americas. Headquartered in Charlotte, N.C., Duke Energy is a Fortune 500 company traded on the New York Stock Exchange under the symbol DUK. More information about the company is available on the Internet at: http://www.duke-energy.com.

This release includes statements that do not directly or exclusively relate to historical facts. Such statements are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Those statements represent Duke Energy's intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors. Many of those factors are outside Duke Energy's control and could cause actual results to differ materially from the results expressed or implied by those forward- looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include: state, federal and foreign legislative and regulatory initiatives that affect cost and investment recovery, have an impact on rate structures, and affect the speed at and degree to which competition enters the electric and natural gas industries; the outcomes of litigation and regulatory investigations, proceedings or inquiries; industrial, commercial and residential growth in Duke Energy's service territories; the weather and other natural phenomena; the timing and extent of changes in commodity prices, interest rates and foreign currency exchange rates; general economic conditions, including any potential effects arising from terrorist attacks and any consequential hostilities or other hostilities; changes in environmental and other laws and regulations to which Duke Energy and its subsidiaries are subject or other external factors over which Duke Energy has no control; the results of financing efforts, including Duke Energy's ability to obtain financing on favorable terms, which can be affected by various factors including Duke Energy's credit ratings and general economic conditions; lack of improvement or declines in the market prices of equity securities and resultant cash funding requirements for Duke Energy's defined benefit pension plans; the level of creditworthiness of counterparties to Duke Energy's transactions; the amount of collateral required to be posted from time to time in Duke Energy's transactions; growth in opportunities for Duke Energy's business units, including the timing and success of efforts to develop domestic and international power, pipeline, gathering, liquefied natural gas, processing and other infrastructure projects; the performance of electric generation, pipeline and gas processing facilities; the extent of success in connecting natural gas supplies to gathering and processing systems and in connecting and expanding gas and electric markets; the effect of accounting pronouncements issued periodically by accounting standard-setting bodies; and conditions of the capital markets and equity markets during the periods covered by the forward-looking statements.

In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than Duke Energy has described. Duke Energy undertakes no obligation to publicly update or revise any forward- looking statements, whether as a result of new information, future events or otherwise.

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SOURCE Duke Energy