Statoil's Trading, Power Systems Still on the Block
Statoil Energy's sale of 1.1 Tcf of gas recserves and 6,500 wells in the
Appalachian Basin to Equitable Resources earlier this month for $630 million
was the first of three possible transactions (see NGI, Jan.
10), a spokeswoman said last week. The latter two, which would include
the company's top-30 trading operations and growing power development arm,
are expected to involved an eastern-U.S. electric utility buyer and take
place before March, according to one inside source.
The company began moving its Houston operations to its Alexandria headquarters
last week in preparation for closing down the Houston office. The Houston
marketing and trading group is expected to be operating at least through
the end of the month and plans to come up with a transition plan to ensure
service will not be disrupted.
Although E&P was the company's forte, its energy trading operations
grew significantly over the past few years. While its E&P assets were
valued at about $674 million at the end of 1998, Energy Trading and Energy
Services assets combined were valued at $336 million, up from only $143
million two years earlier.
Energy trading revenue nearly tripled in 1998 to $3.1 billion as megawatt
hours sold jumped almost five-fold to 66.4 million and gas sales rose over
80% to 445 million MMBtu's. Income from Energy Trading operations, however,
declined from $1.4 million in 1997 to $0.6 million in 1998 as a result
of increased costs associated with ramping up new trading activities.
It's Power Systems assets were valued at $107.8 million at the end of
1998 compared to $21 million two years prior, and the division posted $7.7
million in net income in 1998, compared to a $144,000 net loss the year
prior. The division operates seven generating facilities with aggregate
capacity of 192 MW and holds equity interests in 115 MW. In addition, it
has four gas-fired merchant plant projects in various stages of development
with an aggregate 1,700 MW of capacity.
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