In its continuing effort to pare down debt and shore up its domestic exploration and production program, El Paso Corp. has agreed to sell almost all of the rest of its Asian power assets to a subsidiary of Globeleq Ltd. for $109 million. The assets to be sold include power plants in Pakistan, Indonesia, Bangladesh and the Philippines. El Paso did not disclose the number of plants to be sold, but it said that with the latest transaction, it has contracted or sold all but one of its Asian power plants, with total expected proceeds of $464 million. The transaction is expected to close in the fourth quarter. These sales, the company said, are part of a plan to reduce debt, net of cash to $15 billion by the end of this year. Since mid-March, El Paso has announced or closed $0.7 billion of its targeted $1.2-1.6 billion of asset sales.
With higher prices and daily production up 28%, Houston-based independent Noble Energy Inc.'s second quarter income rose 90% from a year ago to the highest level in its history, $136.9 million ($1.87/share) compared with $72 million ($1.24) in 2Q2004. Cash flow grew 49% to $329.9 million compared with $221.4 million. Part of the growth in daily production was attributed to Noble's acquisition of Denver-based Patina Oil & Gas last year. In the first half of this year, Noble's worldwide gas production averaged 417 MMcf/d while in North America gas production averaged 269 MMcf/d. Quarterly production was 139,765 boe/d, which included 27,344 boe/d from Patina assets. The second quarter results included 45 days of Patina's results. However, excluding Patina, Noble's production still was up 3% over the same period of 2004, with domestic production up 21%. Excluding Patina, production increased 3% over the same period last year and 7% compared to the first quarter of 2005. Domestic production increased 21% compared to the second quarter last year.
Chesapeake Energy reported a 99% increase in second quarter net income to $163.8 million, or $1.71/share, from $97.2 million, or $1.12/share. The company's production rose 31% to 1,244 MMcf/d, 89% of which is natural gas. Its average realized gas price rose to $5.95 from $4.87Mcf in 2Q2004. Chesapeake's proved reserves reached 5.9 Tcfe, with 948 Bcfe added in the first half of the year. The company's reserve replacement equaled 535% at a drilling and acquisition cost of $1.49/Mcfe.
KeySpan Corp. reported an 86% drop in second quarter earnings from continuing operations to $18 million or $0.11 per share compared to $128.5 million or $0.80 per share for the same period last year. However, the company met analysts' earnings estimates for the quarter. The large earnings decline was attributed largely to the absence of contributions from Houston Exploration and to the impact of milder shoulder month demand on electric and gas utility operations. For the six month period ended June 30, KeySpan reported earnings from continuing operations, less preferred stock dividends, of $252.4 million or $1.52 per share, compared to $375.1 million or $2.35 per share for the same period last year. " The second quarter is normally a shoulder period and we are encouraged by the solid results compared to last year, in spite of very cool weather in May," said CEO Robert B. Catell. "We remain on track to achieving our customer growth in the gas business, with a goal for 2005 of close to $50 million in new gross profit margin. Our electric business completed all necessary maintenance work to continue its reliable performance, as it is prepared to serve the New York area during the peak summer season." KeySpan's 2005 earnings guidance remains at $2.30 to $2.40 per share, as announced in December 2004, excluding special items.
Amerada Hess Corp. said it has purchased EnLine Energy Solutions' natural gas marketing business. EnLine supplies gas to more than 200 commercial, industrial, and municipal customers in North Carolina, South Carolina, Georgia, Tennessee and Virginia. The transaction closed on Aug. 1.
The Ohio Power Siting Board approved the construction of a $41 million, 25-mile gas pipeline for Columbia Gas of Ohio in southern Delaware County and northeastern Franklin County. The pipeline will complete Phases IV, V, and VI of a new pipeline used by Columbia to provide gas service to customers in the northern Columbus area. The new phases of the North Columbus Loop pipeline will enable Columbia to ensure adequate gas service for customers and provide support for additional growth in the area. A substantial portion of the project is located in southern Delaware County, which is currently the fastest growing county in Ohio.
With an emphasis on its electric utility operations, Pacific Gas and Electric Co. notified the California Public Utilities Commission (CPUC) last week that it intends to file for a $654 million rate increase later this year to be effective in 2007. The rate hike by the PG&E Corp. utility would be to cover proposed upgrades of its natural gas and electric infrastructure covering central and northern California. The utility said it expects to apply to the CPUC for $485 million of new revenue for its electric distribution system; a $94 million increase for natural gas operations, and $75 million for investments in generation plants. PG&E's utility will file its main application on Dec. 1, and it expects the CPUC to hold public hearings and take testimony next year with a decision by the end of 2006. "The rate increase is needed to replace aging infrastructure, meet rising demand for gas and electricity, recruit/train new employees, and upgrade power plants," the utility said. The proposed rate increase would be 1.6%, or $1.03/month, for average electric customers, and 2.8%, or $1.44/month, for average natural gas customers.
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