CNG Boosting Budget Commitment to E&P
Consolidated Natural Gas (CNG) is taking advantage of depressed
prices in the E&P sector and spending more of its money where it
sees the most long-term bang for the buck. Having pulled out of the
marketing business, CNG's $524.5 million capital budget for 1999
continues the company's focus on expanding its exploration and
production business. More than 60% of the 1999 budget is allocated
to CNG's E&P subsidiary, CNG Producing Co.
"We intend to use CNG's financial strength to press our
advantage in E&P," said George A. Davidson Jr., CEO of the
Pittsburgh-based company. "While many other companies are forced to
curtail their drilling programs, the portion of our E&P budget
dedicated to exploration - the key to future growth - is targeted
to go up 25% next year."
CNG's overall 1999 capital budget is down from this year's
anticipated spending of $792 million. This is primarily because of
$191 million that was invested in projects in 1998 in Australia and
Argentina that will not be duplicated. International investments
are made on a case-by-case basis as projects are identified.
Spending for information systems throughout CNG also is expected to
fall by about $30 million as those projects have been finished or
are nearing completion.
Spending at CNG Producing is budgeted at $326 million in 1999,
compared with an initial 1998 budget of $307 million and expected
spending of $354 million. The added E&P spending in 1998 was due
primarily to increased exploration and developing exploratory
"While we will work with our partners - Shell and Murphy - to
develop the recently announced North Marlin deepwater discovery in
the Gulf of Mexico, total E&P development spending is expected
to be down in 1999 because most of the work has been completed on
CNG's Nautilus and Nemo discoveries on the continental shelf,"
In other business segments, the 1999 capital budget compared
with 1998 anticipated spending is: gas distribution, $128 million
vs. $147 million; gas transmission, $55 million vs. $58 million;
and corporate and other, $16 million vs. $42 million. The segment
reductions are generally due to the lower requirements for
Joe Fisher, Houston
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