South Jersey Gas (SJG), which serves more than 322,000 residential, commercial and industrial customers throughout New Jersey, on Thursday filed a petition with the New Jersey Board of Public Utilities to decrease its gas supply service rate effective Oct. 1. On average, residential bills would decrease 3.8% or about $6.48/month. "We know the unusually high cost of energy last winter presented a challenge to many of our customers," said CEO Edward J. Graham. "Since last winter natural gas prices have gradually decreased, and our filing is based on projections that natural gas prices will be lower during the upcoming winter than they were last year. In addition, we're aggressively seeking opportunities to reduce gas costs by restructuring our gas supply portfolio, while continuing to provide high quality gas service," Graham added.
Vinson & Elkins LLP will pay Enron Corp. $30 million in cash and waive its $3.9 million in claims against the Enron Corp. bankruptcy estate as part of a settlement agreement announced Thursday. The settlement remains subject to the approval of the United States Bankruptcy Court for the Southern District of New York.
Nexen Inc. said subsidiary Nexen Energy Marketing Europe Limited (NEME) completed the acquisition of Foundation Energy Limited, a privately held power and gas marketing company based in the United Kingdom. Foundation has an experienced team of marketers, traders and support personnel and Nexen said the operation is poised for future growth in the European marketplace. It will change its name to Nexen Energy Marketing London Limited. NEME was formed in 2005 following Nexen's acquisition of Buzzard and other UK North Sea assets in 2004. It is responsible for marketing all of the crude oil, gas and liquid products from Nexen's North Sea assets and will be managing total North Sea volumes of 100,000 boe/d following the start-up of the Buzzard field later this year. The acquisition of Foundation Energy will compliment NEME's existing marketing activities by enabling it to offer a wider range of energy marketing services to customers in both the UK and continental Europe.
The Empire District Gas Co. said it completed the purchase of the Missouri natural gas distribution operations of Aquila Inc. The operations consist of 48,500 customers in 44 Missouri communities in northwestern, north central, and west central Missouri. First announced in September 2005, Aquila entered into agreements to sell four utility businesses in Michigan, Minnesota, Missouri and Kansas to various companies for a total of $896.7 million. Joplin, MO-based Empire said the total purchase price paid for the Missouri operations, including working capital and net plant adjustments of $17.1 million, was $102.1 million. Empire received approval for the purchase from the Missouri Public Service Commission on April 18. "The purchase of the gas property will allow us to diversify our weather risk, balancing our current summer air conditioning peak with this natural gas winter heating peak," said Ron Gatz, COO of Empire's gas operations. "It is a strategic fit for us. We offered employment to the 51 Aquila field employees who have been providing service to customers in these communities. Forty-eight employees have chosen to join us..."
The Houston Exploration Co., which plans to focus its efforts in the U.S. onshore, reported it has completed the sale of substantially all of the Louisiana portion of its Gulf of Mexico (GOM) assets for $590 million ($530.8 million net). At year-end 2005, the assets, which were sold to a private company, had proved reserves estimated at 186.1 Bcfe. The Houston-based independent, which announced a strategic shift in its exploration efforts last November, said in April that it would sell the offshore assets. "The closing of this transaction represents a significant step forward in our ongoing efforts to restructure the company as a pure onshore operator," said CEO William G. Hargett. "[W]e are pursuing a balanced plan that will include the continued execution of our share repurchase program, the development of our existing assets, the acquisition of additional properties in U.S. onshore basins that meet our strategic, operational and financial criteria, and the repayment of outstanding bank debt." By the end of 3Q2006, Houston Exploration expects to pay about $30 million in net profits interest to a predecessor owner of some of the GOM properties. It also expects to unwind existing gas hedges on the assets, which total an equivalent of up to 80,000 MMBtu/d for the rest of 2006. Based on current natural gas prices, the cost to unwind the hedges is estimated to be $10-20 million.
El Paso Corp. received another vote of confidence by a credit ratings agency after Moody's Investors Service upgraded the corporation and its subsidiaries' ratings by two notches and affirmed a "positive" rating outlook. The upgrades, said Moody's, follow El Paso's progress in meeting its 2006 financial goals after reducing about $2 billion of its debt since the beginning of the year and selling $500 million of common stock in May. Standard & Poor's Ratings Services also upgraded El Paso's credit ratings last Tuesday to "B+" from "B" following the progress the company has made to refocus its businesses. Its outlook is positive. "The substantial debt reduction this year and the common stock offering mark a turning point in El Paso's credit history that warrants a two-notch upgrade," said Moody's Vice President Mihoko Manabe. "The offering allowed for reduction of debt and demonstrated access to the stock market." Deleveraging, said Moody's, has stabilized El Paso's credit profile and supports its long-term viability. "Over the last three years, the company has reduced its business risks through sales of more volatile, unprofitable business assets. With its divestment program and business restructuring about complete, Moody's expects El Paso's financial results to gain traction and to reflect more clearly the steady-state performance of its core pipeline and [exploration and production] E&P businesses than has come through during the past few years of financial distress and restructuring."
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