Constellation Energy

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The integrated utility company Constellation Energy, Baltimore, (NYSE: CEG) reports that it intends to sell its upstream gas assets and potentially its 38% ownership position in the MLP Constellation Energy Partners LLC (NYSE: CEP) to help alleviate current liquidity problems. CEG chairman and chief executive Mayo Shattuck III, in a conference call, said, "This has always been in our plan to harvest this portfolio. We're just adding to this process the rest of the upstream portfolio." He said the company will continue to support Constellation Energy Partners through its operating support agreement and that "over time we will strategically resolve that situation. Right now the real leverage is in selling upstream gas assets." As of year-end 2007 and including assets from the MLP, Constellation held some 655 billion cubic feet equivalent in proved reserves producing more than 67 million cubic feet equivalent per day. These assets are in Louisiana, South Texas, Wyoming, Arkansas Fayetteville shale, Ohio, West Virginia, the Montana Williston Basin and offshore Alabama. Stephen R. Brunner, president and chief executive of Constellation Energy Partners, says, "Constellation Energy informed us that they are committed to continuing to provide all the services to the company as agreed to in its management services agreement. We value our strategic relationship with Constellation Energy and appreciate their commitment to continue to provide ongoing support to our company. He says he does not expect Constellation Energy's strategic plan to have an immediate impact on the business operations and "we remain focused on running the business and executing on our strategic plan. We continue to focus on achieving our 2008 commitments and delivering cash flow stability and future growth to our unit-holders."