Denver-based junior independent Delta Petroleum Corp. has announced a stock merger agreement with long-time partner Castle Energy Corp., whose CEO died in August. Castle, headquartered in King of Prussia, PA, already held a 32% stake in Delta, or about 6.7 million shares in the company, and Delta will issue another 1.8 million shares in the transaction. Castle sold all its direct operating assets in the United States in May 2002 to Delta in exchange for Delta shares, which were worth about $38.7 million at the time. Under terms of the merger agreement, Castle shareholders will get 1.164 Delta shares for each Castle share, an offer worth $20.28 per Castle share as of Tuesday's stock market close. On Tuesday, Delta's shares closed at $17.42/share, while Castle closed at $19.77/share. At the end of the second quarter, Castle held interest in about 166 oil and natural gas wells in western Pennsylvania. Its reserves at the end of September totaled 8.885 Bcf of gas. Delta's core operations are located along the Gulf Coast and in the Wind River and Piceance basins of the Rocky Mountains. It also holds leases in the Columbia River Basin in eastern Washington. Joseph L. Castle II, the company's founder, chairman and CEO, died unexpectedly in August. Under Castle's leadership, the company grew into a mid-sized public energy company which had exploration and production and natural gas marketing operations in fourteen states. Following his death, Sidney F. Wentz was named chairman and Richard E. Staedtler became president and CEO.
Touting its third quarter financial results as an indication that its post-Chapter 11 bankruptcy reorganization is now complete, Sioux Falls, SD-based NorthWestern Corp. reported net income from continuing operations of $9.3 million, or 26 cents/share, compared with a loss from continuing operations of $25.2 million for the same period last year. Consolidated net income for the quarter was $8.8 million, or 25 cents/share, compared with a net consolidated loss of $29.6 million for the third quarter in 2004. "Our third quarter results reflect the successful restructuring of NorthWestern across all core areas of the business," said NorthWestern CEO Michael Hanson, who touted stronger earnings and cash flow, along with continued debt repayment, improved operating results and a stronger balance sheet. "We have had solid financial performance and are ahead of schedule on our targets for repaying debt."
Canadian Superior Energy Inc. said that the consolidation of its deepwater "Mayflower" exploration license (EL 2406) and its shallow water "Mariner" exploration license (EL 2409) has been approved by the Government of Canada and the Province of Nova Scotia. The ruling allows Canadian Superior to apply a $10 million Mayflower work deposit to drilling the next Mariner well. The Mariner Project lands are located nine kilometres northeast of Sable Island, offshore Nova Scotia, encompassing an offshore area of 101,800 acres (100% Canadian Superior), and directly offsets five significant discoveries near Sable Island, including the ExxonMobil Venture natural gas field. Also, upon consolidation, the exploration term for Canadian Superior's 100% deepwater "Mayflower" license (EL 2406) will be extended for two additional years, from the current expiry date of Dec. 31, 2006 to Dec. 31, 2008; and, thereafter, 50% of the license area will be extended for an additional two years to Dec. 31, 2010. Canadian Superior's Mayflower deepwater project exploration license covers 712,000 acres and mapping to date indicates the presence of five sizeable deepwater prospects.
WGL Holdings Inc., parent company of gas utility Washington Gas Light, said Wednesday that it has postponed the release of its quarterly financial report because it discovered inaccuracies in prior financials regarding subsidiary Washington Gas Energy Services, Inc. (WGEServices), its energy marketing subsidiary. The company said earnings for the market unit may have been understated in certain prior periods. The company had planned to release earnings last week and hold a conference call. But in the course of closing its books for the quarter and year ended Sept. 30, it found that net income of WGEServices may have been understated on a cumulative basis from the first quarter of fiscal year 2003 through the third quarter of fiscal year 2005. The company continues to review its computations and will release earnings when the necessary analysis is complete. Utility earnings have been unaffected by the analysis. Based on the latest information, the effect of this earnings understatement will be recorded in this financial report for the company's fourth quarter of fiscal year 2005. The amount to be recorded is not expected to be material to net income of the company for the year, WGL said.
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