El Paso Corp. plans to restate its 4Q2003 and year-end 2003 consolidated statement of income to reclassify a deferred tax benefit related to its discontinued Canadian exploration and production operations. The restatement will not impact 2003 net income, earnings before income and taxes or cash flow, and will have no impact on financial statements for 2002 and 2004. It does increase the loss per share from continuing operations to $1.01/share from 87 cents/share. The Canadian E&P operations were classified as discontinued operations in 2004, and under generally accepted accounting principles, the financial statements for 2003 and 2002 were revised to reclassify revenue and expenses for these operations from continuing to discontinued operations. The revision, said El Paso, should have included an additional $82 million of deferred tax benefits associated with the sale that was reported in continuing operations in El Paso's recently filed 2004 annual report on Form 10-K.
Tractebel Energy Services, Inc., the U.S. retail energy business of Belgium-based SUEZ Energy International, has changed its name to SUEZ Energy Resources. "When discussing our company with customers and the public in general, referencing the global presence and financial strength of our parent company SUEZ was always part of the conversation," said CEO Zin Smati. "It just makes sense that we would officially adopt the SUEZ brand and further align ourselves with the group's depth of experience. When you have a lineage that's more than 150 years old, you'd be wise to use it." SUEZ employs 160,700 people worldwide and achieved revenues of EUR 40.7 billion (US$52.3 billion) in 2004, 89% of which were generated in Europe and in North America. Houston-based SUEZ Energy Resources NA provides electricity and risk management solutions to commercial and industrial customers in 12 markets (Texas, New York, New Jersey, Massachusetts, Maryland, Maine, Pennsylvania, Ohio, Rhode Island, Delaware, Connecticut and Washington, DC).
ConocoPhillips' board declared a quarterly dividend of 62 cents/share, a 24% increase over the previous quarter's rate of 50 cents/share. The board also declared a 2-for-1 stock split in the form of a 100% stock dividend, payable June 1 to stockholders of record as of May 16. The company also said last week that it expects its first quarter production to be flat with levels in the fourth quarter of 2004. Production for the year is expected to rise 3% compared to 2004 levels, excluding its 11.3% investment in Lukoil. Greater production output in Venezuela and China this year is expected to be offset by the impact of unscheduled maintenance in Canada and reduced volumes in the United Kingdom and Norway. Among the major factors affecting its first quarter financials were higher oil prices and lower U.S. natural gas prices. Other factors affecting its financials included higher U.S. refining margins, lower international refining margins, significantly lower worldwide marketing margins, a capacity utilization rate in the low 90% area and increased turnaround activity and costs. First quarter turnaround costs are expected to be $120 million before tax. ConocoPhillips also expects to see a net after-tax gain of $290 million in the first quarter related to its ownership in Duke Energy Field Services (DEFS) and DEFS' sale of TEPPCO Partners LP. As of the end of the first quarter, its interest in DEFS remained at 30.3%. Additional transfers related to the restructuring are expected to occur in the second quarter, subject to regulatory approvals.
In an interim 1Q2005 update, BP plc said overall oil and natural gas production is expected to be about 4.09 MMboe/d, which is about the same output level as the final quarter of 2004 and slightly higher than the 4.015 MMboe/d reported for the same period a year ago. The company reiterated that average production for full-year 2005 is expected to be in the range of 4.1-4.2 MMboe/d. However, the London-based major warned that its 1Q2005 refining margin would fall below that of 4Q2004. It attributed the decline to negative foreign exchange effects and an increase in routine maintenance operations. Two weeks ago, during a maintenance operation, an explosion occurred at a BP refinery in Texas City, TX, killing 15 people. BP did not provide details on how the accident may affect its future income. The company will report earnings on April 26.
The Department of Justice's Enron Task Force has filed a motion in a Houston federal court seeking to try former Enron Corp. Chairman Kenneth Lay in May or June on bank fraud charges for allegedly issuing false statements for loans he obtained. Lay pleaded innocent last July on 11 criminal fraud and conspiracy charges (see NGI, July 12, 2004). Last October, U.S. District Judge Sim Lake separated the bank fraud indictment from the conspiracy case against Lay and his two co-defendants, former Enron CEO Jeffrey Skilling and Richard Causey, former chief accountant. The conspiracy trial is still scheduled for January 2006. Since Lake separated the charges, Lay's fraud trial date, in which he is the only defendant, has been uncertain. However, prosecutors said in court papers that the hiatus before the start of the conspiracy trial next year will allow the bank fraud trial to proceed.
Stanley Horton, who once guided Enron Corp.'s vast natural gas pipeline system, has been appointed COO and president of Cheniere Energy Inc. Horton, who is charged with helping Cheniere develop several liquefied natural gas (LNG) receiving terminals along the Gulf Coast, assumes his new position April 18. After Enron declared bankruptcy, Horton became CEO of the reorganized CrossCountry Energy LLC, the entity that held Enron's Transwestern Pipeline and Citrus Corp., which owned 100% of Florida Gas Transmission Co. Horton also previously served as president of Northern Natural Gas, when Enron still owned it. CrossCountry was purchased last November by CCE Holdings, originally a joint venture between Southern Union Co. and GE Commercial Finance Energy Financial Services, and since then, Horton has served as COO, integrating CrossCountry with Southern Union's Panhandle Energy.
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