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SEMCO ENERGY Obtains Approval From Regulatory Commission For Acquisition of ENSTAR Natural Gas Company

PORT HURON, Mich., Oct. 25 /PRNewswire/ -- SEMCO ENERGY, Inc. (Nasdaq: SMGS) today announced that it has received an order from the Regulatory Commission of Alaska (RCA) approving the joint application of SEMCO ENERGY, Inc. (SEMCO ENERGY) and Ocean Energy, Inc. (Ocean) for the transfer of the Certificate of Public Convenience and Necessity held by ENSTAR Natural Gas Company (ENSTAR), and for a transfer of controlling interest in Alaska Pipeline Company (APC). In each case the requested transfers were from Ocean to SEMCO ENERGY.

William L. Johnson, Chairman and Chief Executive Officer said, "This is wonderful news. Having obtained the final required approval from regulatory authorities, we can now proceed with the closing of the acquisition of ENSTAR/APC. The closing is anticipated to occur by November 1, 1999, substantially ahead of schedule. The timing is important because it allows SEMCO ENERGY to take ownership of the Anchorage-based company in the beginning of the high revenue heating season."

SEMCO ENERGY signed a purchase agreement on July 15, 1999 with Ocean to acquire ENSTAR/APC for approximately $290 million including $60 million in debt. Ocean is an international oil exploration and development company based in Houston, Texas.

Two regulatory approvals were required to complete the acquisition. The consent from the RCA and a review by federal anti-trust authorities pursuant to the Hart-Scott-Rodino Anti-Trust Improvement Act of 1996, which was obtained September 2, 1999.

The order includes a number of customary conditions. SEMCO is directed to adopt ENSTAR's existing rates on an interim basis and to file cost of service information by July 1, 2000. Acquisition adjustment will not be allowed for the purpose of setting rates unless the RCA determines a showing has been made that would be in the public interest.

SEMCO ENERGY, a diversified energy services and infrastructure company, owns SEMCO ENERGY GAS COMPANY and SEMCO ENERGY VENTURES. SEMCO ENERGY GAS COMPANY distributes natural gas to over 250,000 customers in Michigan. SEMCO ENERGY VENTURES acquires and operates businesses involved in gas engineering and quality assurance services, pipeline construction services, propane distribution, intrastate pipelines and natural gas storage businesses in various regions of the United States.
CONTACT: Analysts Contact, Edric R. Mason, Jr., 810-989-4104, or fax, 810-989-4098, or Media Contact, Francis R. Lieder, Jr., 810-987-2200 ext. 4186, or fax, 810-989-4098, both of SEMCO ENERGY

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding SEMCO Energy's business which are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" in the Company's Annual Report or Form 10-K for the most recently ended fiscal year.

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