updated 6/4/2007 10:40:45 AM ET 2007-06-04T14:40:45

Gas and electric company Dominion Resources Inc. said Monday it will sell most of its U.S. onshore oil and gas exploration and production operations through two transactions for a combined $6.5 billion.

Loews Corp., which charters offshore drilling rigs to oil and gas explorers, will buy Dominion's operations in Michigan, Alabama and the Permian Basin of Texas for $4.03 billion.

XTO Energy Inc. of Fort Worth, Texas, will acquire Dominion's operations in the Rocky Mountains, Gulf Coast, New Mexico's San Juan Basin and South Louisiana for $2.5 billion.

As of Dec. 31, the two operations comprised a total of about 3.51 trillion cubic feet equivalent of proved natural gas and oil reserves. Both deals are expected to close in August.

New York-based Loews also owns CNA Financial Corp., the tobacco company Lorillard Inc., Loews Hotels and the watchmaker Bulova Corp. It is led by the Tisch family and once owned the CBS television network.

Dominion has said previously that it wants to refocus on its power generation and energy distribution, transmission, storage and retail businesses. The process to divest its Mid-Continent Basin operation will begin in July, but the company reiterated plans to retain its Appalachian operations.

Dominion added that, as a result, of the divestitures it expects to generate operating earnings in 2008 of $6 per share or more.

Copyright 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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