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TECO COALBED METHANE ACQUIRES TRANSCO GAS WELLS FOR $15.5 MILLION

 TAMPA, Fla., July 12 /PRNewswire/ -- TECO Energy, Inc. (NYSE: TE) announced today that its subsidiary, TECO Coalbed Methane, has entered into an agreement to acquire all of the coalbed methane gas properties in Alabama's Black Warrior Basin of Magnolia Methane Corporation, a subsidiary of Transco Energy Company.
 The agreement provides for consideration of $15.5 million in cash, plus production payments based on various percentages of net proceeds generated from gas production.
 Magnolia's holdings include 160 producing wells out of a total of 500 which presently produce about 12-13 million cubic feet of gas per day, most of which is sold under long-term contract. All are located on properties adjacent to TECO's existing projects.
 "Since the wells were drilled prior to January 1, they all qualify for the Section 29 nonconventional fuels tax credit," said Timothy L. Guzzle, TECO Energy chairman and chief executive officer. "For that reason, our shareholders will benefit from attractive, immediate returns. And looking ahead, I fully expect earnings from coalbed methane to grow, as gas prices push higher over the 10-15 year lives of these wells."
 TECO Coalbed Methane currently owns interests in about 450 wells from two separate coalbed methane projects in which the company is teamed with Taurus Exploration, Inc.
 The company's share of gas production from its existing projects is now about 1.2 billion cubic feet per month. The gas is sold to Birmingham-based Southern Natural Gas (SONAT) under a long-term purchase agreement. A federal income tax credit, estimated at 99 cents per thousand cubic feet for 1993, is earned on coalbed methane gas produced from the projects' wells through 2002.
 TECO Energy is a diversified energy-related holding company headquartered in Tampa. Its principal operating companies include Tampa Electric Company, TECO Transport & Trade, TECO Coal, TECO Coalbed Methane and TECO Power Services.
 -0- 7/12/93
 /CONTACT: Mike Mahoney of TECO Energy, 813-228-4271 or home, 813-961-9456/
 (TE)


CO: TECO Energy, Inc.; TECO Coalbed Methane, Transco Energy Company;
 Magnolia Methane Corporation ST: Florida IN: UTI SU: TNM


PC-JB -- FL003 -- 0260 07/12/93 09:04 EDT
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Publication:PR Newswire
Date:Jul 12, 1993
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