Pickens’ Sale of Gas Property to Seagull Is Off

The proposed $350-million sale of natural gas properties by T. Boone Pickens’ Mesa Limited Partnership to Seagull Energy Corp. has been called off because Seagull failed to obtain acceptable financing commitments, the companies said today.

The action is a setback for Mesa, which planned to use the sale to help reduce a $1-billion debt.

Mesa and Seagull first announced the deal in October and reaffirmed it two weeks ago. The deal hinged on Seagull obtaining financial commitments by last Friday, however.

“We’re not able to get financing on terms we considered acceptable,” said Alan Payne, a spokesman for Houston-based Seagull. He declined to discuss specific terms.

Seagull had planned to help finance the transaction by selling 3 million shares of common stock. That sale will not occur now.

Mesa’s cash flow has been reduced by low natural gas prices. The partnership has been looking for ways to repay $1 billion in short-term bank debt.

Despite losing the Seagull transaction, Mesa will be able to meet make a $100 million payment on the debt due at the end of the month, said spokesman Jay Rosser.