USG requests approval of $2 million natural gas asset sale

By Caroline Salls

Pittsburgh, July 26 - USG Corp. requested approval of its proposed $2 million non-auction sale of natural gas assets, according to a Monday filing with the U.S. Bankruptcy Court for the District of Delaware.

The assets to be sold include debtor United States Gypsum Co.'s 75 natural gas well leases, located in western Pennsylvania, as well as some related pipelines and mineral rights and assets.

According to the filing, the gas wells are not located close enough to any of U.S. Gypsum's plants to allow it to directly use most of the natural gas produced from those wells. As a result, U.S. Gypsum generally sells the gas that it produces from the wells.

Therefore, since U.S. Gypsum does not directly use the gas from the wells, and given current favorable prices for such assets, U.S. Gypsum has determined that it should sell the natural gas assets.

According to USG, Greco & Lander, PC, which it hired to assist in marketing and selling the natural gas assets, said it will obtain the highest possible offers for the assets if the buyer believes no further bankruptcy court action will be needed to consummate the sale.

"If prospective buyers believe that there will or may be a further bankruptcy auction for the natural gas assets, they will be hesitant to make their best offer [until the auction occurs]," the motion said.

A hearing is scheduled for Aug. 29.

USG, a Chicago-based building materials company, filed for bankruptcy on June 25, 2001. Its Chapter 11 case number is 01-02094.

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