Dominion Power 2005 Annual Report Download - page 19

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Dominion 2005 17
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Our offshore business in the Gulf of Mexico’s deep water
includes working interests in seven producing fields,
with five more under development. Success in deepwater
exploration and production requires careful management
of costs and risks.
Investing and Allocating Our Capital Wisely
Allocating capital wisely across all businesses is key to
our future success. In 2006, we expect to spend about
49 percent of our $3.8 billion capital budget on E&P, which
reflects the increasing costs of exploration and drilling
and the expansion of our onshore operations. Managing
increased insurance costs also will be a challenge.
We plan other major investments in 2006, including
customer service upgrades and new customer connections
at our utility distribution subsidiaries. These will account
for 14 percent of our 2006 budget, or $525 million.
Expansions at our Cove Point LNG facility and other
incremental build-outs of our gas storage system will
account for another 5 percent, or $190 million.
Taking A Longer View Of Credit Metrics
These investments are the backbone of our future growth
and profitability. We make them with our long-term financial
strength in mind. Thanks to our strong financial position,
we will be able to generate the required investment capital
while remaining a solid investment-grade company.
In fact, in early 2006, we announced the sale of certain
businesses expected to raise about $970 million, plus
adjustments to reflect capital expenditures and changes in
working capital at its targeted closure in 2007. Equitable
Resources has agreed to purchase our natural gas distribu-
tion utilities in Pennsylvania and West Virginia. Together
these utilities serve less than 12 percent of our 4 million
electric and natural gas local distribution customers in the